Falling behind on mortgage payments can be stressful and overwhelming. But don’t worry; many homeowners face this issue, and there are ways to help you get back on track. This blog will explain the proactive steps you can take to seek professional help to protect your home, avoid foreclosure, and regain control of your finances.
Four Ways to Work with Your Lender if You’re Behind on Mortgage Payments
If you have missed mortgage payments, the first thing to do is talk to your lender. The sooner you get in touch with them, the more likely they will work with you to offer options to help you get back on your feet.
As you navigate this process, remember that it’s in the bank’s best interest for you to pay back as much of your loan as possible. Foreclosure is expensive for the bank, and it occupies many resources, so it’s easier and more cost-effective for them to work with you.
#1: Forbearance
Entering forbearance temporarily suspends your payments and stops your lender from pursuing foreclosure. If you’re experiencing a short-term hardship, like losing your job, obtaining an injury, or having a sickness in the family, your lender may be able to put your loan into forbearance.
#2: Repayment Plan
Naturally, the best way to bring your account current is to make a lump sum repayment paying back any of your missed payments. Unfortunately, this may not be reasonable for everyone. If you cannot make outstanding payments in a lump sum, you can talk to your lender about establishing a more suitable payment plan that keeps you out of foreclosure and helps you make missed payments in a manageable way.
#3: Refinance
If you are able to refinance your loan with another lender or lending service, this will bring you current on your payments, helping you avoid foreclosure. The other benefit is that when you refinance a loan, you can lower your payment, so you can better afford your mortgage in the future.
#4: Principal Reduction
The last chance you have with your lender is a principal reduction. While these are difficult to come by, they are possible. A principal reduction is when your lender agrees to lower the principal amount you owe to avoid foreclosure. It’s more cost-effective for your lender to reduce the principal amount than for them to pursue foreclosure, so it’s worth inquiring about this alternative if you’re having trouble making your mortgage payments.
Unique Solutions for Your Financial Situation
If you’ve fallen behind on mortgage payments and aren’t getting much help from your lender, you still have options. Here’s a look at some alternative solutions, depending on where you are in paying off your mortgage.
Your Mortgage Is Nearly Paid Off
If your mortgage is nearly paid off, the equity you’ve built in your home will allow you various solutions.
The options we find most useful for our clients are as follows:
- Stay In Your Home and Pay Off Debt | If you have equity in your home but are facing foreclosure due to missed mortgage or property tax payments, we can help you keep your home. We’ll cover liens and other debt you might have, giving you the time to get back on your feet. You can pay off your debt at an affordable rate and keep your family home.
- Sell Your Home for Cash | A cash offer is an excellent option if you have a lot of equity in your home because, in most cases, most of that cash will go right into your pocket. You only need to cover the outstanding portion of your mortgage loan, and the rest goes to you.
A Large Portion of Your Mortgage Is Owed
If you still have quite a bit left to pay back on your mortgage, you may feel like you’re in a difficult position. It’s important to know that you still have options. At Renewed Homes, we make it a point to offer legitimate, helpful solutions to all our clients, regardless of how much equity you have in your home.
Here are a few ways Renewed Homes can help you get back on top of your mortgage payments:
- Build Back Your Credit | Missed mortgage payments and foreclosures can seriously damage your credit. For many, that’s the worst part of the entire process. Renewed Homes will take over your mortgage, but keep it in your name to rebuild your credit. As we make the regular payments, your credit will start to rise.
- Sell Your Home to Renewed Homes| If you don’t have much equity in your home, you can still move on in a more traditional as-is or short sale for cash. Renewed Homes will work to make a fair offer that gets you out from under your home and away from the potential of foreclosure. Then, you’re free to move on with a bit of cash in your pocket to help you with a fresh start.
Get Help from Renewed Homes When You’re Behind on Mortgage Payments
One of the benefits of working with Renewed Homes is that we can offer you a range of options that may not be available to you through traditional lenders. We understand that every situation is unique, and we work to find the solution that best fits your needs and goals. Our expert team can help you explore alternatives to foreclosure and understand the pros and cons of each option, so you can make an informed decision about what’s best for you.
If you’re ready to make strides toward saving your home from foreclosure, our team of experienced professionals can guide you through the process and answer any questions you may have. Contact us today to see how we can help!
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