Missing mortgage payments can have serious consequences. Explore your options for avoiding foreclosure and saving yourself from financial trouble.
If you’re late on your mortgage payments, or you know you’re going to have trouble in the near future, it’s important to know how to handle the situation. From working with your lender to Ask4Offer, you do have a few options available before the foreclosure takes place.
Whatever your situation, remember that ignoring a problem with your mortgage payments could make things worse. The earlier you take action, the better off you’ll be in the long run.
Once you’ve missed a mortgage payment, you’ll usually be contacted by your mortgage company by mail to notify you that it’s past due. These letters not only mention the missed payments, but will also inform you of the possibility of losing your home if the payments aren’t caught up.
Often your lender will try to find ways to get your mortgage back in good standing. If you’re unable to work something out with your lender, however, the mortgage company may begin foreclosure proceedings. Foreclosure can be a time-consuming and stressful process.
If the bank forecloses, it could seize your home and force you to move out. If you can, it’s best to work things out with the lender before things get that far. Fortunately, there may be ways you can resolve problems with your bank.
If missing your mortgage payments is a short-term problem, you may be able to catch up on your payments by working with your lender. You may be able to get caught up with reinstatement, forbearance, or a repayment plan.
Reinstatement requires you to make a single payment for the entire balance due. Forbearance means your lender may be willing to wait on the missed payments for a short time.
However, even with forbearance, you will still be required to catch up on your payments either by paying the full amount or making a repayment plan.
Finally, a repayment plan usually involves making your regular payments, plus part of what you owe on past due payments. For example, if miss a monthly of $2,000, your lender may require you to pay $400 a month toward your missed payment (plus any interest that’s built up) until it’s current.
Many homeowners who are late on payments may choose walking away from their home. Yet, whether it happens before during foreclosure, walking away from your home could leave you in worse financial shape.
Along with immediately damaging your credit rating, mortgage lenders will also view you as a liability for years to come, meaning you won’t be able to purchase a new home. Many landlords check credit scores, so you may even have difficulty renting.
You could run into other consequences too, like owing taxes on your home, or having your lender get a judgment against you for missed payments or losses in home value.
If you don’t have any way to make your payments, it may be best to sell your home as quickly as possible. But this can be difficult, even in a seller’s market. Whether you go through a real estate agent or attempt to sell the home yourself, there are no guarantees your home will sell before foreclosure.
Ask4Offer helps you eliminate the stress of selling your home or waiting for foreclosure to occur. No matter what condition your home is in, we’ll make you a cash offer within 48 hours. We can even close on your home in as little as one week. If you’re late on your mortgage payments and struggling financially, Ask4Offer can help you move on with your life.