10 Options When You Are Behind On Your Mortgage

When You Are Behind On Your Mortgage Payments

Do you feel embarrassed when you are behind on mortgage payments? Pandemic issues and other reasons may have put you out of work. So, the inability to pay mortgage payments continues. Don’t panic, there are options left for you to cope with the situation. So, do not lose hope during this crisis time.

Consult an expert who has experience in the finance field for your help. Analyze and weigh the options left to you so that you can achieve some benefits. Do not sit with a broken mind due to your present issues and instead start acting on your problems. Surely, you will find a solution to your loan repayment issues.

You can contact the loan provider and explain the situation to them. Many lenders come forward to help you with your mortgage payment with some modifications.

So, don’t hesitate to contact them for your requirements. Make use of all the options left on the table so you can feel a lot less stressed.

Two important things you should remember about this situation. They are:

Don’t panic, instead, think about the options left for you.

You are not alone because there are plenty of people who are facing the same situation.

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Now let’s look at 10 options available to you when you are behind on your mortgage.

1. Visit The Lenders Office

Make a call to your lender or visit them by getting an appointment. When you speak to him, tell them about your present situation and ask them

to help you. You will feel better knowing the options available to you through the lender when you are behind on mortgage payments. Work on those options after your visit.

2. A Repayment Plan

A detailed repayment plan may be offered to you by your lender. Analyze those plans and see what you can do to make the payment. However, make sure the repayment plan option eligibility is as follows.

Are you facing temporary hardship? if yes, then proceed
If you do not like the refinance option
You will be able to go with the monthly repayment option
If you are falling behind on repayment

3. Consider Refinancing

You can catch up with the refinance option if you

Have mortgage payment monthly basis
Unable to go with a higher rate of interest
having home equity

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4. Loan Modification

A borrower may find it easier with the loan modification to cope with his present crisis.
The borrower can proceed further by following two types of loan modification, such as Flex and disaster relief modification plan.
You can analyze each plan and check if the plans fit your needs and demands.

5. Forbearance

Yet another reliable method available for a borrower when he cannot afford to pay his loan as per terms is Forbearance. As per this method, the lender shall give time to the borrower for repaying the loan. In other words, the lender may temporarily suspend the mortgage payments or at least reduce them.

Forbearance eligibility applies when the lender does not want to select refinance option
Facing the brunt of the pandemic and other personal issues temporarily.

The above eligibility options are considered when you contact the lender for a forbearance plan. It does not affect your credit score much. Get a clear picture of your forbearance options, such as length of the forbearance period, amount reduced, and repayment terms.

6. House Short Sale

If you do not find the above options viable, you can go for a short sale of your house to the lender. However, your loan provider needs to agree with your selling plan at a discount to pay your remaining amount. If this plan is good, then proceed further to avoid foreclosure.

7. Principal Reduction Plan

The borrower can contact the lender to request them to help you with the lower principal amount. If the lender accepts your request, you will have to pay a reduced principal amount afterward. This is an excellent step to avoid the foreclosure issue.

So, do not hesitate to contact the lender for help. The lenders may agree to your proposal even though you feel hesitant to ask them. Many lenders may feel hesitant to go for foreclosure because the process is costly. So, they might agree to your request for principal reduction.

8. Property Sale To Avoid Foreclosure

If you want to avoid foreclosure, you can go with the option of selling your home. Consider the following options left to you for selling your home. The traditional way of selling your house: You can contact a realtor for selling your home.

However, the borrower who wants to sell his house has to wait until his house is sold to someone. You can make use of the income from selling your home to pay off your mortgage.

Consider selling your house to an investor: An investor in the market settles the house buying process quickly without the need to wait for any approval process. This is a quick process for getting your cash from the investor paying off your mortgage.

9. Deed-in-Lieu Of Foreclosure

This method helps a borrower escape from the foreclosure issue. This method has another name which we call Mortgage Release. As per this method, you will have to transfer the ownership of your property to the lender.

Why it is so? Yes, the bank would release the payment owed to you.
Practically, this option seems too tough for the borrower because many banks do not accept this option, even though it is legal.

10. Make Use of Military Options

In case you are in the Military, avoiding foreclosure is an easier option for you. However, you will have to fulfill the following options

Received permanent change of station orders
In duty or left recently
Injured while in duty, also applicable if your spouse was injured

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Takeaway

The above 10 options when you are behind on your mortgage can help you win the battle. You will need to check the compatibility of each plan so that you can make proper choices. Do not leave any stone unturned when you deal with the above plans.

Disclaimer: This article is meant for educational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.

References:  Refinancing, Repayment Plan, Loan Modification, Forbearance, House Short Sale, Principal Reduction Plan, Property Sale To Avoid Foreclosure, Deed-in-Lieu Of Foreclosure

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