What to Do If You’re Upside Down On Your Mortgage

DENVER - July 9, 2014 - PRLog -- When you get behind on your mortgage payment it may seem like the world is collapsing around you with fears of foreclosure and financial ruin. Rest assured, it does not have to be this way, as there are things you can do to get back on track.

Make a phone call

One simple call to your mortgage company can save months of stress and headaches. The mortgage company does not want to foreclose on the house; this is an avenue that is expensive for them. If they can reach an agreement with you on modifying the terms of a loan or moving payments to the back end of the loan, that is much easier and cost effective for them. But they cannot do anything unless you call them and try and work out a payment agreement. After the last financial crisis, mortgage companies have more resources to avoid foreclosure and they only want to foreclose as a last resort.

Consider the options

The options that mortgage companies have and the willingness to help vary from company to company. The most common is the use of mortgage forbearance, which is a process to help with a temporary hardship where mortgage payments are allowed to be skipped for an agreed upon time and repaid either in increments or pushed to the end of the loan period. There are certain refinancing offers that a mortgage lender might be able to help you with though there are conditions to qualify for certain programs and offers. Some of these programs, like the federal Home affordability Modification program, (HAMP) may be an options for certain home owners.

Get a second job

You may consider getting a second job for a while until you get back on your feet financially.  It may only be a few months and you will feel like you can breathe financially again.  It may seem a bit daunting to have two jobs, but in the long run it will save you much stress and headaches.

Consider downsizing

If you are really in dire straits, you can consider selling your home and downsizing into something more affordable. This is not usually a homeowner’s first choice, but some do consider this when they hit a financial bump in the road.  You can talk to a realtor to see what your home appraises for and what they think you’ll get for it.  It may be quite feasible.

Borrow from your 401K

This is not your best choice, but if you simply need a small amount of money to get caught up on your mortgage payments, you could borrow from your 401K should you want to get caught up quickly. You can always put that money back into your 401K account later on down the road.

There are various options available for a homeowner having trouble making a mortgage payment but you need to reach out to these resources at the first sign of trouble to avoid having additional financial troubles or the possibility of foreclosure. Do some research online and don’t be afraid to call a financial professional to discuss your options. You do not have to sit and fret about your mortgage month after month.  Do your part and see what avenue will be best for you when it comes to getting caught up on your mortgage.

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