Here are five tips that may help you if you are falling behind on your mortgage payment!
1. Review your budget and prioritize expenses.
Can you afford this home? Is there sufficient income to make your mortgage payment along with other bills? Be honest! Has your income increased or decreased since purchasing your home? Or have your monthly payments increased because of changes in your mortgage? In order to stop the vicious cycle of robbing Peter to pay Paul you must trim your budget and manage your spending habits, or increase your income. Prioritize your expenses!! Your mortgage should be first on the list, followed by true life-need expenses. During tough economic times consider the PERK money management system: what expenses do you need to PUT OFF, ELIMINATE, REDUCE or KEEP?
2. Call for help!
Falling behind in your mortgage can be a terrifying experience, but you do not have to face it alone. More than half of homeowners facing foreclosure did not call for help when they fell behind in their mortgage payments. Do not make a bad situation worse. Ignoring your situation will not make it go away. Take the steps listed to protect your home, your family, and your credit rating. Calling a HUD approved housing counseling agency like HOME is a step in the right direction. They will advise you of the various loan workout options available to you; and work with you to develop a plan of action to help you avoid foreclosure of your home.
3. Contact your lender to discuss loan workout options.
Do not wait until the foreclosure has been scheduled to call the lender. It will probably be too late. Unfortunately, most lenders are unable to offer a loan workout option to you if you are not past due. But, once you are 15 days past due call the loan workout department. You can discuss your crisis with them and they will explore your available options. Most people are afraid to call their lenders – but avoiding talking to them NEVER works!
4. Save money.
This may sound like an impossible task when you are about to fall behind in your mortgage, but it is necessary. Saving money to apply toward a past due mortgage payment shows the lender you are serious about keeping your home; and it shows your ability to discipline your spending.
5. Avoid foreclosure rescue scams.
When you are facing a financial crunch remember there are always unscrupulous people willing to lure you with promises of a “quick fix.” Beware of dishonest investors, predatory lenders, too good to be true pre-approved loan offers, and phony counseling agencies. Homeowners facing financial troubles are especially vulnerable because they are desperate to find a solution to their problems. Do not sign anything! Any and all offers should be reviewed by a HUD approved housing counseling agency like HOME to ensure the offer is not a scam.
If you need additional help, you can call HOME at 804.354.0641 and our foreclosure prevention team can help you.