If you're a homeowner and you are unable to make your mortgage payments, the lender may seize your property, evict you, and sell the home as it is written in the mortgage contract.
Talk to Your Lender: Once you begin having trouble making your mortgage payments you should contact your lender and explain to them your financial situation. This will give your lender the opportunity to work with you, and hopefully create a plan that helps you keep your house. Don't stop paying your bills, and don't wait until you can't make payments to act on your financial hardship.
It's often that many homeowners are embarrassed or scared to tell their lender that they're having money problems. This is more common than most people think, and almost everyone will go through a financial hardship at some point in their life.
Canadians who have lost their homes to foreclosure in the last few years. If you're having trouble paying your mortgage, learn about the steps you can take to avoid foreclosure or to minimize your debt after it happens. Quick action is the key to success -- it can save your home and/or help protect your credit rating.
Possible Solutions with your Lender: Sometimes lenders may accept partial payments for a few months and allow you to make up the difference at a later date or redo your loan terms completely.
When you first contact your lender let them know everything about your situation, they can help. Some options your lender may give you include:
- Forbearance: This allows you to make a reduced payment, no payment, or an agreed-upon amount and time period. The difference will need to be made up at a later time. Typically, the lender is going to agree to forbearance as long as you can demonstrate that you will soon receive a bonus, tax refund, or some other extra cash.
- Loan Reinstatement: You agree to make up your missed payments by a specific date.
- Loan Modification: The lender agrees to alter the terms of the loan so that it assists you in making your mortgage payments. An example would be that the lender may agree to add your missed payments to your loan balance and stretch it out over a longer timeframe. This may lower your payments, though it will result in more interest over the life of the loan.
Steps To Avoiding Foreclosure
- Mortgage Refinancing: Refinancing your mortgage is one of the ways in which people are able to lower their monthly payments, and extend the length of their loan. Keep in mind that this extends the total amount of interest you pay as well. Some lenders will charge closing costs for your refinance that you may have the ability to roll into your refinanced mortgage, with a higher monthly payment.
- Consider Your Options: Stay positive and don't give up. Millions of Americans lost their home to foreclosure over the last few years. A foreclosure will significantly reduce your credit score and will make it nearly impossible to buy a home anytime in the immediate future. The profits from selling your home don't cover the portion of you loan that is unpaid, the lender may sue you for the rest.If you're having trouble making mortgage payments your options include:
- Getting Government Help
- Negotiating with your Lender
- Filing for Bankruptcy
- Selling your home yourself
- Giving your home deed to the lender
- Getting Government Help