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What To Do If You’re Behind On Your Mortgage Payment

April 1, 2011 · Print This Article

This is a guest post by Cam Jarvis

Life contains some unexpected trials. Without a conscious choice of your own, you may find yourself in a financially tricky situation. Due to health problems or unemployment you could suddenly be unable to pay for your mortgage. The worst thing you can do if you’re facing this kind of predicament is to do nothing. You need to do something and here are some tips that explain what exactly that something should be.

Talk With Your Lender

It’s uncomfortable and you may feel tempted to avoid their calls, but you need to be upfront with your mortgage lender. If you have extended beyond your grace period and are now more than 30 days late on your payment, you will not only have your back payments to come up with but you will also have a late fee assessed. Explain your situation and they will likely come up with a plan to get you on track again. If you are willing to make any kind of effort, they will be willing to work with you.

Refinance

You might consider refinancing to bring your loan current and to pay off your lender. If you don’t have any money left in savings, you also might consider taking the cash out of your equity. This would enable you to re-establish a cushion in the event that you find yourself in a similar situation down the road. This of course all depends on your ability to handle a larger monthly payment. Be sure to look at all the effects of a refinance before you sign the papers.

Sell Home

If you are unable to work out a refinance you should seriously consider selling your home before you go into foreclosure. The late payments on your mortgage will show up on your credit report, which will likely prohibit you from qualifying for a loan for the next 7 years, but in the end will be better than a foreclosure on your record.

If you’ve attempted all these steps and still have a financial puzzle that can’t be solved it could be time to look at declaring bankruptcy. This would also be relevant if you have multiple properties that are in default. Consulting with a lawyer is your best option at this point. There are specialists in any part of the country, anywhere from Tallahassee to Las Vegas bankruptcy attorneys, who know the specific laws in your state and will work with you to make the most of your situation.

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