Living paycheck to paycheck is not uncommon for many americans.
Often, when you find yourself struggling to make the next mortgage payment, you may be tempted to try to skip a payment, thinking you can repay it later once you get back on track.
But a passive approach to a financial issue — particularly one involving something as impactful as your mortgage — is not advisable. Being proactive and straightforward with your creditors is far more beneficial in a personal financial crisis.
The importance of honesty
Openly admitting your inability to pay your mortgage is probably one of the last things you want to do, but being forthright about your situation will serve you far better in the long run.
Don’t wait too long
The longer you wait to make your financial struggle known and the harder you attempt to work the system, the less favorably your personal financial crisis is likely to play out.
Don’t assume that you have no options — you won’t know if your bank or servicer will work with you unless you ask.
For homeowners who have already missed a mortgage payment, it is recommended making the most of rules restricting dual tracking, by seeking loan assistance as soon as possible.
Dual tracking is when a mortgage servicer forecloses on a property while simultaneously considering a loan modification.
Pursue all possible options
The Hardest Hit Fund (HHF) was developed in 2010 for homeowners who are not able to make their monthly mortgage payments in an effort to prevent foreclosure and stabilize the neighborhood.
Not all states participate in the HHF, but those that do focus on helping two groups of people stay in their homes: unemployed homeowners who are looking for new work, and homeowners who owe more on their mortgage than their home is worth.
If your situation is more serious and your ability to pay back the loan is truly compromised.
Failure to act can lead lenders to believe that you don’t have an interest in your financial obligations.
If you wait too long to ask for help, you could eventually discover that it’s too late to make a change. If foreclosure is unavoidable, consider reaching out to an attorney who specializes in helping people through or, if you have a good case, fighting the foreclosure process.