Being behind on mortgage payments is a situation that many homeowners hope that they never have to experience.
It’s scary thinking that you might be subject to thousands of dollars in penalties, a severe drop on your credit score, or the worst consequence of all, foreclosure.
Being late on a mortgage can wreak havoc on your financial life that has ripple effects for many years to come.
If you live in the Dallas, TX, area and find yourself behind on your mortgage payments, you should know that not all hope is lost.
There are ways to mitigate this damage. If you’re running late on your financial commitments, here are five solutions that you might want to consider.
1) Ask Your Lender To Defer Payments
Many lenders are more flexible than people assume when it comes to payments.
Think about it this way – you’re entering into a 30-year contract to pay a fixed amount every month. Lenders know that 30 years is a long time.
Life happens! If you are behind on your mortgage because you have lost your job or you have a significant medical bill to pay, then sometimes you can ask your mortgage company to agree to stop payments (or reduce them) temporarily.
The financial term for this is “forbearance.”
Forbearance works when a lender agrees to modify the payment schedule for a short duration. For example, they might agree to have no payment for six months to give you time to find another job.
Or they may decide to take a $1,000 per month amount instead of $2,000 while you’re working off your other obligations.
Typically, you’ll have to repay these funds at the end of the forbearance period. So you may have six months’ payments due at once. Or, you might have the option to pay it back gradually over a year or so.
There are often Federal and State programs that provide financial incentives to lenders to temporarily stop payments. The Hardest Hit Fund is one example of such a program.
Talk with your lender and see if you can work out an alternative payment plan, at least temporarily, while you figure something out.
2) Refinance Your Mortgage
Sometimes this isn’t an option because your credit score is already suffering, but it can be worth a shot.
If you can make your payments, but you can no longer afford how big they are (or you have an ARM mortgage that ballooned after the interest rates reset), then you might want to explore refinancing your mortgage.
Sometimes you can get out of your current one and into more favorable terms. This option is sometimes much more doable if you have significant equity in your home.
You can ask your current lender if they would refinance your mortgage, or you can shop for a new one. Either way, this is another option to explore.
3) Sell Your House to an Investor in Fast Dallas, TX
Statistically-speaking, once homeowners start to have difficulty with a mortgage, it’s hard to recover.
You can do this, but you should be aware that the odds are, unfortunately, not in your favor. Many times, there are complex financial issues that need resolution before you’ll be able to pay for your mortgage.
An excellent example of this is when a divorce happens. Until a judge orders the dissolution to be final, it can be challenging to maintain a mortgage.
You may find yourself in a situation where you know that you’re likely going to run into issues again because the payments are too high, the bank isn’t cooperating with you, your life situation has changed, or you no longer earn the same income.
If that’s the case, then you’re going to want to sell your house fast to a cash buyer.
Cash House Buyers DFW will make an all-cash offer on your home and let you walk away from your mortgage quickly.
You won’t have to worry about missed payments, further problems with your credit score, or new applications. You can leave your home with your money in your hands!
4) Sell Your Home With A Real Estate Agent
Alternatively, you can sell your home with a real estate agent and hope that you get an offer that goes through as soon as possible.
This tactic is riskier than the cash buyer because you don’t know if your home will ever sell, but it is an option.
Generally speaking, dealing with a cash buyer is better in these situations because you can guarantee that you will receive your money as soon as possible.
5) Earn Extra Income
You can always earn some side money to cover your mortgage or at least pay enough to encourage the lender to work with you. You can even rent out rooms in your house on Airbnb (if it doesn’t violate local laws) and use that money to pay your mortgage.
You can drive a ride-sharing car, do odd jobs for other people, take a part-time job.
Whatever makes you a little bit of extra money, if it means being able to be current on your mortgage payments, it’s probably worth doing!
You Have Options
Ultimately, if you find yourself behind on mortgage payments, you should remember two truths: you should communicate with the lender, and you also have options. Many times people want to stay silent with their lenders. This tactic is a bad idea. Being late on your mortgage payments and saying nothing will lead to foreclosure. However, if you call your lender and work with them, there’s a good chance that you can work something out that will permit you to stay in your home – at least in the short-term, until you can figure something out.
You also have options. One of those options is to walk away from the headache and stress with an all-cash offer. Instead of fretting where the money is going to come from or what moves the bank will make, you can receive a fair offer on your property and walk away. Assuming you have some equity in the home, you’ll often receive an offer for more than your mortgage is worth, so not only do you no longer have mortgage worries, but you also get to have some money in the bank.
If you’re interested in selling your home fast in Texas, contact us today and let’s see how we can get you out of your home!