10 things you can do if you can no longer make your mortgage payment

To start with, lenders are typically prohibited from forcing your into foreclosure in your first month of defaulting. That could be a relief. But even before you get to the first month of defaulting, there are measures that you can take which would help you deal with imminent closure.

  1. Talk to your lender

The first step that anyone should take when they realize they can no longer be able to make the mortgage payments is to talk to the mortgage company. The truth, however, is that many people often act in denial and fail to explain themselves to their lenders.

The first thing your lender would do is to seek to understand whether your financial situation is permanent of temporal. The joy of every mortgage provider is to have you afford the mortgage and clear it.

Another option would be to talk to the Consumer Financial Protection Bureau, which would then give you a housing counselor to help you evaluate your options. You could be having a temporary financial stress that would clear soon, and then you resume your payments. Whatever it be, let your lending institution know of your status.

  1. Consider renting your home. It is possible that renting rates could be higher than your mortgage payments and thus give enough to pay your mortgage and also remain with some little cash.
  2. Consider filing a partial claim. This allows for your mortgage insurer or the US Department of housing and development to help you reduce your interest rates or even your principal amount.
  3. Consider Refinancing only if you are not stretched to the maximum. The challenge with this option is that there is a hefty fee to be paid and interest rates could as well go higher.
  4. Go for a loan modification. This is an option available for only those who mortgages originated before January 1, 2009. Also, the balance should be not more than $729,750. With this option, the bank agrees to change the terms for payment when convinced of your financial situation. It, however, is not a quick fix; it may take many months to process.
  5. Sell your home to real estate investment companies or to anyone willing to buy it at a good price. It is better than to wait for auctioning. Unfortunately, the current market value for some homes may be much lower than what they owe on their mortgages. In that case, consider a Short Sale or a Deed in Lieu of Foreclosure.
  6. Declare bankruptcy; this could be damaging to your credit status and even your career.
  7. Walk away. This was rampant during the height of crisis of foreclosures, those who could not pay would just send the keys to the lender and walk away from your home.
  8. Foreclosure. While this is devastating, it just does not happen overnight; you could have several months of living in your house before it is foreclosed. If you choose to go to court and block foreclosure, you could extend the period for staying in your house.
  9. Homeless programs. When it eventually happens, and you have moved out, consider contacting the National Coalition for the Homeless; they often have programs that could prevent you from going to the streets.
  10. Sell your home to one of those credible companies that buy houses for cash. Though they won’t give you 100% of the value of the home, if you go will a reputable company, you can usually still net about the same as if you sold with a real estate agent.