What Options Do I Have if I’m Behind on My Mortgage Payments?

foreclosure, behind on mortgage

Many of the people who meet with Home Buyers MA have one problem in common: they are late paying their mortgages.

This can be a troublesome circumstance, but you have options when in such a predicament, but you have to be mindful that there is no speedy solution. It may be a bit painful, but you need to ask yourself, “Is this a short-term issue or something I may possibly have to deal with long term?” Are you in a temporary scenario that’s stopping you from paying your mortgage, or are your problems going to worsen with time no matter what path you choose?

Consider these fundamental solutions if you’ve fallen behind on mortgage payments.

Respond to the Bank

The initial thing to anticipate when you’re late on payments is a letter from the bank. They will tell you about your tardiness and the outstanding amount you’re obligated to pay. Don’t ignore the letter. Contact your loan servicer to discuss your options as early as you can. The bank isn’t out to get you, and though they could foreclose on you, they want you to keep paying your mortgage, as it’s in their best interests.

Rather than fall into a financial hole you’re unable to dig yourself out of, they will collaborate with you during troublesome times. Explain your circumstances to the bank immediately. Once you’ve addressed your intentions to pay what you owe, you’ll have the following options:

1.Rent Out the Property

If selling your home isn’t something you’re willing to do, you can rent it out. Most people wouldn’t be eager for this option. It can be difficult for family members to have a stranger walk around in their home.

Consider renting out a room to a tenant. You can separate the tenant’s living space from yours by installing some doors and borders in key areas. In doing so, you can add an extra stream of revenue via rental payments without regularly engaging with the tenant. It’s not the greatest answer, but at least you won’t have to leave your residence.

2. Borrow Money

Alternatively, you could borrow extra funds to get caught up with your mortgage payments. HUD or a similar resource can set this up for you. These loans can help you with outstanding payments, but all it does is increase your property debt.

Will the home become unaffordable down the road, or will you realistically be able to catch up to your payment schedule? Should you fall further back into debt, you would likely leverage the remaining equity on the property. If you need to sell because of overwhelming payments, a lack of equity will hurt your chances of selling it at decent selling price. Only use this option if you’re positive you’ll be reacquiring enough revenue down the road.

3. Return It to the Bank

You can also return your home back to the bank. With this option, there are things to consider, like foreclosure or a deed in lieu, as well as bank programs like “cash for keys.”

On your, IRS returns, the 1099S and default judgments represent legal income. Your lender will inform the IRS of a forgiven debt in a short sale or foreclosure, and the owner would then have to pay taxes on whatever the forgiven debt was. Unfair as it may be, this is the reality of this option.

4. Put It Up for Sale

You can always put your home on the market. This might be the last thing you want to do, but it’s usually a much more secure choice than attempting to get a loan adjustment. More often than not, a loan adjustment is merely buying you time.

A loan adjustment won’t make you financially solvent. Unless you are sure that your financial circumstances will get better sooner than later, a loan modification will only delay the inevitable when facing foreclosure, with more trouble and debt this time around. As such, selling your home might be the most practical choice if you’re unable to pay your mortgage.

Moving Ahead

If you’re under pressure or concerned about this ordeal, relax. Be mindful of what is important – your health and your loved ones. Be cool, calm, and collected, and take a realistic stock of your choices. Just don’t ignore the issue and hope it disappears. You need to deal with the problem if you want it resolved. Locate individuals who can provide you with sound advice. Contact Home Buyers MA and learn what choices are available to you. If you decide that selling your home is the best option, Home Buyers MA will be happy to help you through the entire process.


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