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Steps To Take When You Can’t Afford Your Mortgage

Steps To Take When You Can’t Afford Your Mortgage

Financial troubles can happen to anyone for any number of reasons. In tough times like these, it’s important to know that there are steps to take when you can’t afford your mortgage. Knowing the options may not reduce the stress that fiscal hardship causes, but you must take action before the situation worsens. Failure to maintain house payments doesn’t always have to result in foreclosure.

Determine Whether You Qualify for Help

The first step is to determine whether you can receive financial help. Check with your local agencies as well as international resources to determine eligibility. Many charitable and government programs exist to assist people experiencing difficult times. In addition, help with paying bills may be available, as well as other tools that will allow you to offset costs while sorting out the difficulties.

Ask About a Forbearance

One of the best steps to take when you can’t afford your mortgage is forbearance. Ask for this help as soon as money becomes an issue—don’t wait for missing payments to rack up. Forbearance is essentially a special agreement between you and the mortgage holder to pause payments or foreclosure. It’s only a grace period, though, and you will still have to pay back the missed fees after the agreed-upon pause ends.

Consider a Short Sale

If a pause won’t be enough to recoup the missed payments, a short sale is another alternative to a foreclosure. A short sale allows an individual to sell their home back to the lender for less than they bought it. As the lender will essentially lose money on the exchange, it requires negotiating and some paperwork. However, the benefits of a short sale are numerous, and it’s an excellent way to leave a property that you can’t afford anymore without the credit repercussions of a foreclosure.

Refinance or Modify the Loan

Before things get out of hand, it’s also helpful to ask for a modification or refinance. One of these actions will ultimately set you back in terms of years left to pay off the house, but it’s better than potentially losing the property. Ultimately, what these do is reshuffle the numbers to adjust your monthly payments into a more affordable monthly bill.

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