What to Do When You’ve Lost Your Job and are Behind on mortgage payments
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What to Do When You’ve Lost Your Job and Can’t Pay the Mortgage

If you've lost your job, your only job, the one that pays all the big bills, it's a tough pill to swallow. What if you can’t pay the mortgage? Chances are you're feeling overwhelmed with all sorts of questions. What if you can't find another comparable job quickly? What if you drain your savings completely?

These are all tough questions, but, as the saying goes, the best defense is a good offense. Now, more than ever, it's important to keep a straight head and consider your options.


Contact Your Lender As Soon as You Fall Behind on Mortgage Payments

 Some income is better than no income. If you're entitled to collect unemployment benefits, or even if you're unsure, contact your local benefits office to get the process started. Then call your mortgage lender. Don't be afraid to ask them, "What are my options if I can’t pay my mortgage?" Calling early and before you become delinquent on your payments demonstrates a desire to make things right. 

Explain your situation. Depending on your lender, they may be able to offer you a forbearance option to either reduce or suspend your mortgage payments for a temporary period while you get back on your feet. You might also be given the opportunity to temporarily modify your mortgage payments.


Are There Other Options If I Can’t Pay My Mortgage?


What if you can’t pay your mortgage and you know future employment opportunities are bleak? If you have savings, you're likely going to have to dip into them for the short term. If too much time passes without progress on the job front, you may have to accept the notion of selling your house before you're foreclosed upon. Occasionally, a good real estate agent can help you price your house for a fast turnaround. 

Hopefully, if it sells quickly and covers more than what you owe, you'll be able to salvage your credit score. If you don't have a lot of equity in your home, consider asking your lender to approve a short sale. This means you would sell your house for less than what you owe with all proceeds going to the lender. 

Your lender may also accept a deed in lieu of foreclosure, where you basically turn over your property to the lender instead of paying it off.


A Possible Solution


A difficult situation can arise if you don't have sufficient funds to carry you through while you work with an agent and go through the sometimes long process of repeatedly showing your home. In that case, selling to a real estate investor might be a good alternative. Investors typically offer a cash price for a house. 

And while that price is often less than what you would get in a normal real estate sale, you're usually also not on the hook for appraisal and inspection fees, closing costs, and commissions. The closing process usually goes much faster too, often in as little as seven days. 

If such an option sounds like the best choice for your situation, give us a call today. We'll provide you with a free, no-obligation quote to help you start over.

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