Falling Behind on Your Mortgage? Read This

When economic times are tough, it's easy to start falling behind on crucial monthly payments, including your mortgage. Lagging on a mortgage may feel shameful now, but it's important to realize that it's a position many homeowners have found themselves in, and it's nothing to be ashamed of. When this happens, the most productive thing you can do is focusing on exploring your options to get the bills paid and keep your family in your home. Regardless of the reason for falling behind, whether it was due to job loss, health problems, divorce, or various other issues, there are steps you can take now to help ensure the best possible outcome. 
 

Lay Out All the Options With Your Lender 

It's easy to think of a mortgage lender as an abstract entity with little empathy for borrowers, but the truth is that lending agencies are staffed by workers who have likely seen, if not been in, situations similar to yours and who want to help. It's in lenders' best interest to avoid foreclosure, so your motivations are more aligned than you might think. Try calling up your lender and laying out all the options available to you. Some key points to hit on in your conversation are: 
 

• Forbearance, where your monthly payments are reduced or temporarily suspended 

• New payment plans, which can help you catch up on missed payments 

• Reducing your interest rate, which helps lower your overall monthly payment 

• Increasing the loan term to reduce monthly payments 

• Refinancing for a fixed interest rate 
   

If You Must Sell, Consider a Short Sale 

The ideal scenario in case of a missed mortgage payment is talking with your lender and remaining in your home, but in some cases, you may voluntarily decide to sell the home if you can’t meet your monthly payments. In these cases, see if your lender will consider allowing a short sale, which can reduce the amount you end up having to pay relative to what you owe. 
 

Think About Refinancing Your Mortgage at Some Point 

You don't have to refinance right away, but if the reason you missed your payment was because the amount was simply too much for you to cover in a month, getting your mortgage refinanced can make a significant difference in the payment you'll be obligated to make each month. However, you may want to wait until you're in a stronger financial position to make this move, since refinancing often involves several types of fees, including title fees, lender fees, attorney fees, and more. 

While falling behind on your monthly mortgage payments might feel like the end of the world, there are still numerous options available to you to make the best of the situation. Thankfully, working actively to negotiate with lenders, start repaying the debt, and salvaging your credit can help prevent a worst-case scenario and help keep you and your family in your home.