Your home is probably one of your most valuable assets. If you face possible foreclosure due to sky-high medical bills, overwhelming debt, job loss or another issue, you should act quickly. The longer you wait, the fewer options you may have.
However, before you begin, make sure you fully understand your financial situation and loan terms. The more information and documentation you have when requesting help, the better your chances may be of receiving it.
Contact your loan provider
Your loan provider may be willing to work with you to make your home loan more manageable. It may offer you the option to change your loan’s interest rate from variable to fixed. Or, your lender may negotiate with you for a lower interest rate. Either of these options may lower your payment and give you the room you need in your budget.
Some mortgage holders allow borrowers to defer a portion of the outstanding balance or pay it in increments over time. Extending the loan terms or placing the outstanding balance in forbearance may also be options your lender will consider.
Sell the home
It may not be your first choice, but you may need to free up the money to pay off the mortgage by selling your home. Your ability to do this may depend largely on the current state of the real estate market in your area and the amount of equity you have in the home. If your mortgage is “underwater,” meaning you owe more than the current value of your home, you probably do not have this option.
Research government programs
The federal government has set up a number of different programs to help people overcome mortgage problems and remain in their homes, such as the Home Affordable Refinance Program or the HOPE for Homeowners program. If you are a veteran, you may have options available based on that status. The CARES Act may provide you with options if you are one of the millions of Americans who have recently become unemployed.