Given the glut of lending that occurred over the past few years using “creative” financing, such as adjustable rate and interest-only home loans, many Americans are now facing ever-increasing mortgage payments. In addition, due to the recent problems in the housing market, these same borrowers are finding that they owe significantly more on their homes than the properties are now worth. This combination of factors has led to an upsurge in delinquencies and foreclosures which has become the focus of so much attention in the national media. Unfortunately, it sounds like you may be one of those consumers who is suffering the consequences of the downturn in the housing market and, consequently, in the economy as a whole. I would be lying if I told you that there is an easy fix to your financial woes; however, there are several options that you may wish to explore to help improve your situation. Bills.com offers a wealth of information for consumers struggling to keep their homes out of foreclosure, available on the foreclosure resources page.
Before you do anything else, I would encourage you to contact your mortgage lender to discuss your financial difficulties and to express your intention to bring your June and July payments current after July 23. While the lender will likely not be happy with the fact that you have fallen behind on your mortgage, I would expect that the lender will appreciate your calling to propose a plan to bring your loan current. Also, you should express your financial difficulties with the lender, explaining that while you have every intention of keeping the home, you are currently struggling to make your monthly payments; ask the lender if there are any options it can offer you to temporarily lower your loan payments while you are resolving your financial difficulties. With the skyrocketing number of foreclosures in recent months, many lenders are becoming more flexible to help homeowners stay in their homes. You must remember that lenders do not generally want to foreclose; many lenders are more willing than ever to lower interest rates, waive fees, etc. Even if your lender will not lower your payments, it may be able to suggest some other options that could assist you with making your mortgage payments.
If your lender is not willing to work with you to lower your payments, you may want to consider refinancing your current loan at a lower interest rate. Interest rates are near historic lows, so now may be an ideal time to refinance your loan. Unfortunately, due to problems in the credit markets, many of which stem from the crisis in the housing market, consumer credit has become much more difficult to obtain than it was in the recent past, though things have been easing up some in the past couple of months. If you have excellent credit, you should be able to obtain a refinance loan without much difficulty. However, if your credit is less than perfect, you may struggle finding a lender willing to lend to you. Regardless of your credit situation, I encourage you to contact various lenders to discuss your situation and find out what options are available to you. If you submit your contact information on the Bills.com Savings Center, we can have several lenders and brokers contact you to discuss the loan options they can offer. If you would like to read more about refinancing your home, I encourage you to visit the Bills.com Refinance page.
If you find that none of the options stated above are working for you, you may need to consider selling your home. Selling your property is generally preferable to foreclosure, as it allows you to sell to home on your terms, and allows you to find a buyer willing to pay the best price. In today’s housing market, many consumers owe more on their homes than the properties are worth; if that is your situation, you may want to contact your lender to discuss selling your home through a short sale. A short sale is a lender authorized sale of the property for less than is owed on the outstanding mortgage loan. Depending on the lender and your state’s laws, your lender may forgive the difference between the mortgage balance and the short sale proceeds, or you may be liable to the lender to pay the difference. If you are interested in a short sale, I encourage you to contact your lender and to consult with an attorney in your area to discuss the options available to you.
I wish you the best of luck in your efforts to save your home, and hope that the information I have provided helps you Find. Learn. Save.