Mortgage lenders were being stingy at the beginning of the housing downturn, but now they are finally realizing the ramifications of what is going on with the housing market, so they’re willing to play “Let’s Make a Deal”, but you have to pick up the phone and ask them. Realize that they aren’t going to call you to offer a deal on your mortgage. There are too many people and too little time. If you’re in a bind right now with your mortgage and you think you might be facing foreclosure, don’t give up! Foreclosing on your house should NOT be an option. You will not be able to buy another house for at least three to five years, and even if a lender does extend credit to you, you’re interest rate is going to be horrible.
Here’s what you can do to avoid foreclosure:
- First, evaluate your situation. If you are more than 2 months behind on your mortgage, then proceed to step two. If you are one or two months behind, don’t panic just yet. Get a second or even a third job and work like crazy for a month. Save up enough to get current on your mortgage. Mortgage companies usually won’t accept partial payments. They want it ALL, NOW.
- If you’re 3 or more months behind on your mortgage, call your lender and explain your situation. They can’t erase your debt to them, but they can cut the interest rate to lower your payment. They might even consider letting you pay a portion of your back payments to get current. Even if you’re not behind on your payments, but you are VERY tight on money, you can always try getting your rate lowered. Make sure that you are courteous and cordial on the phone. After all, THEY are doing you a favor, even if they have some responsibility for giving you the loan in the first place.
- Start a budget and devise a plan to increase your income so you aren’t so tight on money. You can check out my Budget Tips and Entrepreneurship for some ideas on budgeting better and starting a side business to increase your household income.