Where do I find assistance to help pay mortgage and other bills?
Unfortunately, with the recent downturn in the housing market, more and more consumers are finding themselves in the same dilemma you are facing. Thankfully, there is help available to consumers like you who are unable to meet their mortgage payments. I can think of several options that may assist you in resolving your delinquency, but which option is best for your situation depends greatly on your income, the amount of equity in your home, and your credit rating, among other factors.
First, you may be able to refinance your current home mortgage. A refinance loan is essentially a new mortgage on your home- the refinance lender pays off your old mortgage company and becomes your new mortgage holder. Thus, a refinance loan would bring your mortgage current and allow you to start from scratch with new payments to a new lender. Depending on the interest rate being charged on your current mortgage, a refinance loan may allow you to obtain a lower interest rate and lower your monthly mortgage payments. Whether or not you can qualify for a refinance loan, or at least a loan that will save you money, depends on your credit score and how much equity you have in the home. Refinance lenders base the interest rates they offer on the potential borrower's credit score and the "loan to value" ratio (LTV) of the potential loan. Your loan to value ratio compares the amount of the loan you need to the value of your home. Ideally, your LTV should be 80% or less, meaning the refinance loan equals 80% or less of the market value of the home. However, depending on your credit rating, you may be able to find refinance loans at a higher LTV, though you can expect to pay a higher interest rate, as lenders are taking more risk lending at higher loan to value ratios. To learn more about refinance loans, I encourage you to visit the Bills.com Mortgage Refinancing page at Mortgage Refinance Quote. If you enter your contact information in the Bills.com Savings Center at the top of the page, we can have several pre-screened mortgage brokers contact you to discuss the refinance options available to you.
As mentioned previously, a refinance loan will require you to make your mortgage payments going forward if your wish to keep your home. If you are not confident that you will be able to maintain your future mortgage payments once your loan is brought current through a refinance or bankruptcy, you may want to consider selling your home. Keep in mind that a refinance loan may lower your mortgage payments, so you should definitely look into a refinance before you decide to sell. However, if you truly cannot afford the mortgage payments, selling the home should allow you to avoid foreclosure and to cash out whatever equity you have built in the home since you purchased it, which you would likely lose in foreclosure. While I understand that no one wants to admit that they cannot afford their mortgage payments, if you honestly believe that you are in over your head with your mortgage, selling your home should allow you to avoid the painful and costly foreclosure process.
The best way to deal with your other debts will depend primarily on the amount and type of debt in question. One option to consider is a Consumer Credit Counseling Service, or CCCS. CCCS companies offer numerous services, such as financial counseling and budget planning, as well as Debt Management Plans (DMPs). In a DMP, the CCCS would arrange a new payment amount with each of your creditors, usually based on a reduced interest rate. You would then make a single monthly payment to the CCCS which would distribute the funds to your creditors, based on the new payment amounts. However, there are several drawbacks to CCCS that you must consider. First, depending on your creditors, it may not be able to reduce your monthly payments enough to improve your financial situation. Second, it may have a negative impact on your ability to obtain a loan. Even though CCCS programs do not generally affect your credit score, many lenders view enrolling in a CCCS program the same as filing Chapter 13 bankruptcy when making lending decisions, so you may not wish to enter into a DMP if you anticipate any large purchases, such as home or an auto, in the near future. Third, the average DMP takes around five years to pay off your debts, so you must be willing and able to commit to a long-term repayment plan. Another option to consider is a Debt Settlement program. In this type of program, rather than making monthly payments to your creditors, these programs negotiate lump sum settlements with your creditors, frequently reducing your debts by 50% to 60% of your principal balances. These programs usually take only 2-3 years to complete, so this is a good option for many people to rid themselves of debt in a relatively speedy manner. In many cases they can also reduce your monthly payment toward your debt. There is one major drawback to debt settlement programs- they will significantly damage your credit rating while in the program and for at least a year or two afterward. However, if you are currently unable to afford to pay your creditors, the hit to your credit may be worth the benefit of ridding yourself of credit card debt. To learn more about these and other options available to you, you should visit the Bills.com Debt Help page.
I hope that the options I mentioned above will assist you in resolving your financial troubles. I wish you the best of luck, and hope that the information I have provided helps you Find. Learn. Save.