If you suddenly find yourself unemployed, a lot of things are going to run through your mind. Perhaps the most panic-inducing thought is how you’re going to pay off your mortgage since defaulting on monthly payments can mean you’re going to lose your home.
Fortunately, there are many ways you can keep up with your mortgage payments while being unemployed. Here are some of the best ones:
1. Speak with your lender
Many mortgage brokers and lenders in Bromley, for example, are more than willing to assist you in times of need. If you know you’re not going to be able to pay sometime soon, let them know and see how you can modify your payment plan for the meantime. Write a formal letter to explain your current situation, and as much as possible, give them a timeline of when you’ll be starting to pay again.
2. Use your savings
Ideally, you would have an emergency fund for times like these. If you don’t have any, use your savings instead. Find out how much money you have and plan your budget around it. Include any additional amount that you can get, such as your severance package, unemployment benefits, and money from other side jobs.
3. Contact government agencies
You may be able to get mortgage assistance if your mortgage loan is insured by a government agency. If this is the case, consider asking for help from agencies like Fannie Mae, Freddie Mac, FHA, VA, and USDA.
4. Ask about forbearance programs
If your lender participates in The Home Affordable Unemployment Program, they may offer you a chance to join a forbearance program. If you qualify, you may be able to get lower mortgage payments or suspended payments for the meantime. In this way, you can get back on your feet without having to worry too much about your payment deadlines.
5. Consider modifying your loan
Another option that you have is modifying your loan to extend the number of years you have to pay in exchange for suspending or lowering payments for a certain time. Aside from extending your loan life, a lender may agree to mortgage modification in exchange for altering your current interest rate.
6. Sell your house
If you have exhausted all of your options, and have no other choice but to sell the house, ask your lender if a short sale is possible. You may be able to sell your home at a fair value based on the current market, which can give you a good chance to start a new life and buy a more affordable house somewhere else.
7. Declare bankruptcy
Filing for bankruptcy should be your last resort because it can make it harder for you to get loans and certain jobs in the future. However, this option may help you avoid or suspend foreclosure. With a Chapter 7 bankruptcy, you need to agree to use your future income to repay your mortgage to stop foreclosure proceedings. On the other hand, a Chapter 13 bankruptcy will help you delay foreclosure proceedings so that you can earn money or strike a deal with your lender.
Avoiding foreclosure is one of the first priorities that you should have when you are unemployed. So, if you suddenly find yourself in this difficult situation, you need to take measures while looking for a new job.