From the time you buy your first home, the pressure is on not to have late mortgage payments. Unfortunately, it’s not all that rare to fall behind at some point.
It’s a common issue and certainly almost never by choice. After all, you worked hard to buy a home in the first place, and for many of us, it is one of the biggest nest eggs we will ever own. Through years of hard work and unforeseen challenges, one thing is true; life happens.
From random expenses that come up, to losing your job… a lot of things can happen to a person for them to get behind on their mortgage payment. Regardless of how it happened, you have many choices to make before you get foreclosure letters in the mail. Many times if you are diligent, and have good information you can gain insight into how you fell behind in the first place and take corrective action before anything major happens.
Mortgage forbearance or deferment are options but you have to be willing to take accountability for the terms of these agreements. Most often involving a pause in your payments with a lump sum owed at the end of that grace period. If you’re not good at budgeting and don’t have a guaranteed way to amass the sum of money you’ll need at the end of the time period, this isn’t a recommended option. If this is the option you end up choosing, your lender has to agree to work with you so contact them as soon as you know it’s the option you’re choosing.
Some of the last options at your disposal can be a short sale or foreclosure. Both of these solutions are less than savory, so before you choose us to help you with a short sale, hopefully, you can use some of these tips to help you save your house.
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1. Identify How You Got Behind
Although generally more of a nuanced subject, when you look at it closely there are generally one or two things that you personally feel got you into this position.
Taking on the task of being self-aware and therefore accountable for your actions is a good first step in all of life’s situations, especially financial hardship. So take a piece of paper and write down all of the factors that you think got you into this situation. Look at what is within your control and what isn’t. If it’s out of your control, like being laid off, don’t focus on the layoff… focus on another form of employment.
Oftentimes we can confuse a problem with an inability to find a solution. For instance, while you can’t force your old employer to give you a job, you can certainly find a new job somewhere. Even if it’s a temporary thing, there are always businesses that are hiring.
When you are able to look at your entire situation you can decipher what is and isn’t within your control. The bigger decisions can then be trading temporary comfort for long-term rewards. It might look like trading in the new car for a vehicle that doesn’t have a monthly payment or getting rid of physical assets that aren’t necessary.
Tightening the belt on what you actually need can free up some capital on your monthly spreadsheet and after a few lifestyle changes, you have the chance to make up for lost gains.
2. Make The Necessary Adjustments
One of the most common ways for folks to get behind is an unforeseen expense, especially if it is recurring. Medical expenses, lawsuits, or child care; all of them can stack up rather quickly.
Similar to taking ownership of lifestyle, reallocating expenses can help to cover the cost of unforeseen bumps and keep the money you set aside for a mortgage going to the right place.
Start by taking down a list of all subscriptions and everyday expenses. Somewhere in between 6 different streaming subscriptions and having a few beers at the bar every day after work, there is often enough to offset these expenses, if there’s not check out our final point.
Taking into account the severity of your situation this can be minor or extreme depending on what you need to accomplish. This can be similar to lifestyle changes, but the deeper note here is to take that loose money and put it towards what you need.
These solutions are more temporary than backtracking on acquired costs in physical overhead.
3. Look At Other Streams Of Income
In today’s culture, unless you are well established in a career, almost all middle-class people have some sort of side hustle. If you are behind on your mortgage and you are only working 1 job there is an opportunity for you.
Assuming you don’t work 80-100 hours a week at one job, there is a lot of low-hanging fruit in the world around you. You can pick up a grocery delivery job, or a second part-time gig to bring in a few extra bucks each week.
Waitressing or restaurant work, in general, is a great go-to option with the convenience of cash in your pocket, maybe even an extra meal. If you are someone with a family it’s not so easy to disappear into the veil of multiple jobs.
Fortunately, the internet can provide multiple opportunities from selling things online to flipping products as a side hustle. With growth, a little bit of discomfort is often the cost of a changed outcome.
In Conclusion…
It is not always a simple task to find your bearings when you are down and out. Getting behind on something like a mortgage is stressful, and feels very personal because it is.
There are many options at your disposal that can help, from legal steps and options from your lender to personal efforts that can lead to recovery. When you combine both opportunities it presents the clarity you might need to understand you are not helpless, you are in control.
There is also a chance you find out that can handle more workload and responsibility leading to living a better life in the long run.