Having a mortgage you can’t afford can be stressful, especially as you try to figure out what that means for the future of your home. There are a lot of options available to help you if you can’t afford to pay your mortgage.
Even if you can’t afford your mortgage anymore, it doesn’t necessarily mean that your house is going to be foreclosed on or that you have to lose your home. A foreclosure attorney can help you through your options to avoid foreclosure.
Contact Denbeaux & Denbeaux today to learn more about how we may be able to help you with an unaffordable mortgage.
Worried About Foreclosure?
If you can’t afford your mortgage anymore and do nothing, after time, your lender will start the foreclosure process. Having unaffordable mortgage payments most likely means that your entire mortgage or a portion of your mortgage is going unpaid each month. An unpaid mortgage balance means that you’re in default, which is the beginning process of foreclosure.
Lenders may wait until you have been in default for more than one month, but every lender has different rules on how they deal with mortgage default. If you know you won’t be able to make your mortgage payments in full, you could quickly face foreclosure.
If you’re in a position where you know you’re going to struggle to pay your mortgage for multiple months or for the foreseeable future, it’s a good idea to look into alternatives to avoid being foreclosed on.
Getting foreclosed on means losing your home, damaging your credit, and affecting your ability to get approved for a mortgage in the future. You may feel lost if you’re facing foreclosure, but there are things you can do. An experienced foreclosure attorney can explain the options available to you that can help you avoid foreclosure.
Use Loan Modification to Make Payments Affordable
Getting a loan modification is one of the most common ways to avoid foreclosure if your mortgage payments aren’t affordable for you.
A loan modification is an agreement between a homeowner and their lender that makes changes to the original loan. Your loan modification could lower your interest rate, split your payments into smaller amounts, or extend the term of your loan to have smaller monthly payment amounts.
You’ll need to apply with your mortgage company to get a loan modification. After your application is approved, your lender will give you your loan modification offer. It’s important to carefully consider a loan modification before agreeing to it. Having an attorney to help you through the process can help make sure you’re getting the modification you need, and your lender is complying with the law.
A loan modification can be a great option to keep you in good standing with your mortgage, but you should make sure that the loan modification is going to be something you can afford. Extending the length of your loan means that you’re paying more interest, and your mortgage could be more expensive than initially planned.
Think About Mortgage Forbearance
A mortgage forbearance is a short-term mortgage relief assistance agreement between you and your lender. This allows your mortgage payments to be reduced or suspended for a short period of time.
Getting a mortgage forbearance can be a good idea because it allows you to work with your lender and can give temporary financial relief. However, there are a lot of risks that can come from a mortgage forbearance. Before agreeing to a mortgage forbearance, speaking to a foreclosure attorney you trust may be a good idea.
Things happen, and mortgage forbearance is for short-term issues. If you’re struggling consistently to make payments or may struggle to pay a larger amount to bring your mortgage up to date in the near future, you may want to consider other options.
Deed In Lieu Of Foreclosure
A deed in lieu of foreclosure is an agreement between the homeowner and lender where the homeowner hands over the deed to the home to avoid foreclosure. Although a deed in lieu of foreclosure does stop you from going through a foreclosure, it damages your credit, and you lose the equity in your home and will no longer have a place to live. Using a deed in lieu of foreclosure may be a good option as a last resort if you’ve already exhausted all of your other options to avoid foreclosure.
Short Sale
A short sale is when a homeowner sells their home in order to avoid foreclosure. Short sales have to be approved by your lender, and there are a few other requirements that differentiate them from a typical home sale.
If your lender agrees to a short sale, the money from the sale of your home will go towards paying off what you owe on your mortgage. Any money from the sale of your home that’s left over after your mortgage is paid off will go to you.
Lenders are likely to agree to a short sale because it saves them from going through the foreclosure process and selling their homes themselves. A short sale might not be the best option if you have alternatives. In order to sell your home through a short sale, you’ll have to meet specific lender requirements that are more complicated, and your credit score will still likely take a small hit. Before deciding to sell your home through a short sale, it’s important to consider all of the advantages and disadvantages.
Bankruptcy
Filing a Chapter 13 Bankruptcy will stop foreclosure proceedings, but it’s not something that we recommend. Filing a Chapter 13 bankruptcy doesn’t erase your debts. You would have a payment plan created to repay what you owe on any outstanding debts, including your mortgage. This could mean you could have a monthly payment to repay that amount that you’re in default on top of your mortgage payment, saddling you with even more unmanageable debt.
Filing for bankruptcy negatively impacts your credit score and will stay on your credit report for seven years. With bankruptcy on your credit report, it could be almost impossible to get any other form of credit. While filing for bankruptcy is an option to stop foreclosure, it’s not one that is recommended because of how complicated it can be and the other negative effects.
Contact A Foreclosure Attorney
Many different options are available to help you if you’re facing foreclosure. Depending on your specific situation, there may be a few different ways you can work towards stopping foreclosure on your home.
Working with an experienced foreclosure attorney can help you with your options. An attorney can walk you through the options available to you and what they could look like.
Contact Joshua Denbeaux today to learn more about how we may be able to help you avoid foreclosure and make your mortgage more affordable.
