Home should be a place of tranquility and refuge. However, if you are struggling to make your monthly mortgage payment, then your home can be a source of stress. You are not alone. Many people have trouble paying their mortgage. This struggle occurs for a variety of reasons, often out of our control. It could be a sudden loss of a job, an illness, or expensive medical bills. Whatever the reason, struggling with paying your mortgage is stressful, and relaxation is probably the last thing you are thinking about. Feeling a source of panic every time you have to pay a bill is no way to live. If you are struggling with mortgage payments, you do have options. At KM Home Buyers we understand this is a rough time, we will help to work with you to help you get back to a hassle-free life. 

What are my options if I can’t pay the mortgage?

Are you sacrificing something to pay your mortgage? This sacrifice could be living in a too-small home, a less safe neighborhood, or cutting back on other necessities like healthy food or healthcare. About 45% of homeowners sacrifice some aspect of living or another just to make their monthly payments. With any trade-off, you are giving something up. Often, your financial goals are sacrificed, which can end up costing you a lot over time. Maybe you are racking up debt on credit cards to pay bills or getting rid of savings. 

If you are struggling with personal finance and mortgage payments, here are some of the options that you can choose from: 

Forbearance

If your financial hardship is only temporary then you can try a forbearance. This means that your loan lender may be willing to reduce or suspend your mortgage payments for a period until you can resume making your normal payments. 

Refinancing Your Loan

Refinance may be an option if you have a good credit score. If your loan has a high interest rate, then refinancing the loan may lower the mortgage rates and your interest payments. 

Debt Settlement

Another option is debt settlement. With a debt settlement, the lender will be agreeing to accept less than the full amount that is owed on the loan term. While this sounds like a good option, it may negatively affect your credit score. 

Rent Your Home

Renting your home might be an option if the amount of rent you collect would cover the mortgage payments. This could be a good option, especially if renting your home can be rented for more than your monthly payment. However, renting your home means that you are still responsible for taxes, insurance, and home repairs. 

Foreclosure

A less desirable option would be foreclosure. This is when your loan lender agrees to release you from the mortgage in exchange for you giving them the deed to your home. This will have a negative impact on your credit score. 

Sell Your Home

Finally, an option to help you with your mortgage is to sell your home. If the home is worth more than you owe, then this option could make the most sense financially. There are different ways to go about selling your home, including going through a realtor. This may seem like the most obvious option; however, realtors charge a commission for setting up the home, selling it, and helping with the paperwork. This commission will impact how much money you get from the sale. 

The other option is working with a cash buying company. These companies will offer a cash lump sum for your home, no matter the state that it’s located in. This is a great option because you sell your home quickly and there is no commission charged on your sale. Plus, cash home buyers take care of all of the paperwork and sell the house for you so that you do not have to worry.

It is important to weigh all of the pros and cons of your options when you are struggling with paying your mortgage. 

Can you get help with your mortgage payments?

There are different mortgage assistance and foreclosure prevention programs across the country that are provided by various companies, federal government agencies, non-profits, HUD counseling agencies, banks, and states. These various organizations have pledged to provide loan modification and other methods of mortgage help. 

Programs vary in what they offer. In some cases, there is direct financial assistance provided to help you pay your mortgage for a short period. In other cases, some form of loan modification or reduced monthly payments may be offered. You can locate your state and find government mortgage help or a foreclosure mediation plan. 

Various banks and lenders that offer mortgage assistance are: 

• Bank of America
• JP Morgan
• Citibank 
• Wells Fargo
• Associated Bank
• Fifth Third Bank

If you are unemployed, there are programs to help you during this time to pay your mortgage. The most well-known is the Affordable Unemployment Program which reduces your monthly mortgage payment for up to six months. 

The last thing that anyone wants to face is being behind on the mortgage payment. By looking into assistance programs or understanding how to go about asking for help can make a play a huge part in getting back on track to making payments and being stress-free. 

How many months can you not pay your mortgage before foreclosure?

When you take out a home loan, it is expected that you will begin making payments immediately. However, many people are aware that you may miss a payment now and then. When you start struggling to make your mortgage payments, then the missed payments may be missed more frequently. So, the thought might cross your mind as to how long you can miss a payment before having your house foreclosed. 

The general rule is that you can miss four payments, or around 120 days, before being in danger of your house being foreclosed. The more mortgage payments that you miss, the more it will cost. This can be disastrous towards your credit and can affect your credit score. There is a process that takes place when you’re heading towards the possibility of foreclosure. 

First Missed Payment

After your first missed mortgage payment, your lender will most likely offer you a grace period. During this grace period, you can send in your payment. After the grace period, you will be charged a late fee.

Second Missed Payment

If you miss the second payment, your mortgage is likely going to be considered in default. Your lender will most likely contact you at this point and discuss why you haven’t made the payments. 

Third Missed Payment

After 90 days of not making payments, you will receive a letter of demand. This letter will inform you of the amount you are delinquent, and you have 30 days to bring your mortgage current.

Fourth Missed Payment

At this point, the foreclosure process will begin. You will be required to pay any legal fees during this time.

Contact KM Home Buyers

Now that you have understood your available options for making your mortgage payment, selling your home, and the process of foreclosure, you have everything you need to start making decisions. We can help you with this process and understanding the options available to you. We want to help make your life stress-free and livable again. Contact us today!