“I’m Behind On My Mortgage Payment And Need Help!”
“What Do I Do?”
Few things are more devastating to families than the prospect of foreclosure. You own your home and you love it — it serves you well. Yet, due to unfortunate circumstances, foreclosure may seem imminent. If you’re behind on your mortgage payment and need help, the stress can be almost unbearable. Worse yet, the foreclosure process can take months or even years, stretching out the pain for longer than anyone wants.
Fortunately, you have options available to you — perhaps more options than you realize. There are many strategies to provide foreclosure help or to catch up on your mortgage payments; these are legal foreclosure avoidance strategies you can implement to help you resolve your foreclosure issue so you can get on with your life.
At National Home Team, we’ve consulted families through every step of the foreclosure process — and we’ve helped many of them avoid foreclosure altogether. Here are the top three strategies that you should try if you find yourself behind on mortgage payments and needing help:
Strategy #1: Work out a deal with your lender
The first strategy is called a “foreclosure workout”. In a foreclosure workout, you’ll sit down with your lender and tell them that you’re behind on your mortgage payments and need help and don’t think you can meet your existing mortgage obligations, but you’d like to figure something out so you can stay in your house and continue to pay your mortgage (and they can continue to receive payments!).
Contrary to popular belief, lenders don’t want to foreclose! It is their last options as well. They want happy customers who pay their mortgages, so lenders are often willing to work with homeowners to figure out a deal that benefits both parties. This might include a temporary reprieve on your mortgage payments, or it might include a catch-up strategy where your outstanding mortgage payments are spread out so you can catch-up and pay them off, or it might include a restructuring of the outstanding amounts that you owe.
There are several ways that your lender can work with you to avoid foreclosure and provide mortgage relief. But the first step is always talking to them honestly and directly.
Strategy #2. Bankruptcy
Filing for bankruptcy may seem like an extreme measure but it is one of the “tools” in your foreclosure avoidance toolbelt. When you file for bankruptcy, you indicate to all of your creditors that you are no longer able to pay your bills. Filing for bankruptcy will put a stop to the foreclosure process because all creditors must stop the collection process.
Filing for bankruptcy, though, is a little extreme: it may require you to sell off some of your assets in order to pay off your creditors. And, a bankruptcy will remain on your credit score for many years, which could impact everything from getting a loan to getting a car… even getting a job. So this shouldn’t be your first line of defense! Just like actually foreclosing on your home is your lender’s final option, bankruptcy should be your final option.
Strategy #3. Short sale help for a foreclosure
The third strategy when you’re behind on your mortgage payments and need help is a short sale — this is where you sell your home and put the proceeds of the sale toward the amount owing on your mortgage loan. A short sale is a preferred method for people facing foreclosure because it is proactive, fast, and very effective.
- It’s proactive, which means that you take matters into your own hands. You aren’t waiting on your lender to provide you with options to catch up on your payments, and you’re avoiding the pitfalls of bankruptcy.
- It’s fast — in some cases, you can sell your home in as little as a week! That’s also because it’s local: Organizations like National Home Team help people going through short sales. We walk you through the steps; help you gain a firm understanding of the situation; and often even provide you with a fair cash offer. That’s right – we buy houses for cash, in as little as a week.
- It’s very effective because a short sale can completely wipe out (or almost wipe out) the amount owed on your mortgage. If there is any amount left over that is not covered by the sale of the property, you’ll be responsible for it (although you can sometimes work out a deal with your lender). A short sale can take a big chunk out of that big number that’s keeping you up at night.
With a short sale, you still end up with the reality of having to leave your home but there is a bright side: The impact to your credit is much less (compared to a bankruptcy or a foreclosure) so this is a smart long-term play to give yourself some options. It’s fast, easy, and effective.