Falling behind on your bills is never a good place to be, but it can happen without any warning.
First, you might start paying your credit card payments late or making just minimum payments. Next, you start paying your utility bills the day before disconnection. Then, you get behind on your mortgage.
When you reach the point where you’re behind on mortgage payments, you need to start seriously considering getting help.
What can you do when you fall behind on your mortgage? What are your options?
Are you wondering about these things? If so, continue reading to learn more about the options you have when you’re in this position.
Contact Your Lender to Work Out a Repayment Plan
A great place to start is by contacting the lender to explain your situation and ask for help. While it’s rare, there are times lenders are willing to offer repayment plan options to borrowers.
A repayment plan allows you to catch up on the past-due balances owed and may offer a reduction in the past-due amount.
For example, your lender might waive some of the late fees charged to your account. They may waive interest charges, too.
If your lender believes that you’ll be able to make your payments from this point on with some help right now, your lender might agree to this option.
Consider a Loan Modification
It’s uncommon for lenders to offer repayment plans without modifying a loan. So, if you ask your lender for a repayment plan and they say no, ask about a loan modification.
Getting a loan modification to go through is never easy or fast, but it will help you save your home if you can get it to go through.
A loan modification changes your entire mortgage, and borrowers use this when they are behind on their payments and have no way to catch up.
With a modification, you keep the same loan with the same lender, but you get a new interest rate, loan duration, and payment amount. It works out your past-due amounts into the new loan, and you start fresh.
Refinance Your Mortgage
Refinancing is another strategy that helps people save their homes when they fall behind. Refinancing eliminates the loan you currently have and replaces it with a new loan.
The new loan has new terms, including a new payment amount, interest rate, and duration. Refinancing is similar to a loan modification but is different because it creates a brand-new loan instead of using the existing loan.
If you’re interested in pursuing this method, you can call a lender for more information. The lender will run your credit to see if you qualify. If your credit is less than great, you might not be eligible for a new loan.
File for Bankruptcy
People who are really desperate to save their homes and have a lot of other debts they need help with will turn to Chapter 13 bankruptcy. Chapter 13 allows you to save a house when you’ve missed some payments by restructuring your debts.
There are major consequences of using Chapter 13 bankruptcy, though.
One, you’ll be on a repayment plan through the court for the next five years. Two, you’ll lose all your credit cards. Three, you’ll have a bankruptcy posting on your credit report for the next seven years or more.
List Your House for Sale
The options so far help you keep your home when you’ve missed some payments, but is keeping your house what you want?
If you’re going to fix the situation you are in, you might not want to keep your home. You might not be able to afford your home. If you can’t afford your home now, is there a chance you’ll be able to in the future?
Choosing to sell a house is often the right choice in this situation. One strategy you can use to sell your home is hiring a real estate agent. This agent will list your property for sale on the real estate market and will begin looking for a buyer.
Before the agent lists it, you may need to stage the home and make updates to it. These steps prepare a home for sale and are often necessary.
The benefit of this route is that you will eventually sell the house and get out from underneath the loan. The downside is the time it takes. You shouldn’t expect to find a buyer right away; it may take weeks or months.
It will take an additional four to six weeks to close on the house after finding a buyer. This method helps you sell, but it doesn’t give you an immediate solution.
Sell Your House to a Cash Buyer
Selling a house is not only possible through real estate agencies, but it’s also possible through cash home buyers.
A cash home buyer is a company that specializes in real estate investing. These companies buy homes for cash, and they buy almost any home imaginable.
If you feel that selling your house is the best way to get out of the financial mess you’re in, this is a strategy you should pursue.
Cash home sales offer fast closings and guaranteed deals. After receiving the offer from the buyer, you’ll be packing and moving out in just a few weeks.
You will have to find a new place to live, but you wouldn’t have to worry about your financial crisis any longer. You’d have the fresh start you need.
How to Make a Decision When You’re Behind on Mortgage Payments
If you’re behind on mortgage payments, the fastest and easiest solution to choose is to sell your home to a cash buyer.
Cash home buyers purchase all kinds of homes and can give you an instant offer. Does this sound ideal to you?
You can learn more about how this works or how much your house is worth by contacting us today.
