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5 Options When You Are Behind On Your Mortgage

You may have experienced a life event where you unfortunately experienced a financial difficulty. This financial difficulty may have been severe enough to not be able to meet your mortgage payment obligation. There are options you have and below we have listed five options you can consider during this difficult time.

1. Contact Your Mortgage Lender

It is best to be upfront with the mortgage lender and they can give you guidance during this time. So as soon as you know you will be unable to make a payment, contact the lender. They have the ability to provide you an affordable loan modification for your unique situation. The lender has a repayment plan they can put into place for you. Sometimes, the lender can offer you a lower payment or defer your payment to a later date. This will allow you time to get your finances in order to where you can continue making payments on the loan.

2. Refinance Your Mortgage

If you have good credit, this is a great long term solution to provide a loan that best suits your unique situation. You may be able to replace your existing loan with a new loan that is more advantageous to you and your unique situation. You may be able to receive a fixed rate or even a lower interest rate on the loan. If you know you are going to refinance the loan, shop around to other lenders to find the best deal for you. Please note that when you refinance it involves taking out a whole new loan on the property. This will come with additional fees and your loan may be different than you current loan.

3. Loan Modification

Instead of refinancing the loan, another option is a loan modification. This type of modification is best if you are experiencing what you believe is a long term financial change due to a life event such as a divorce, loss of job, medical bills etc. This is an option for individuals who may have less than perfect credit and missed multiple payments on the loan. What a loan modification offers is a way to make a monthly payment more manageable. You can have a reduced interest rate, lengthen the loan term, or have the missed payments put onto the balance of the loan. Most lenders will provide this loan modification if they feel you will keep up with the new payment terms agreed upon.

4. Government Assistance

There are federal and state programs available to help with your mortgage payments until you are financially stable again. One of the main programs is called (HARP) "Home Affordable Refinance Program". As long as your home is worth more than you owe and the loan is backed by a federal entity such as Fannie Mae or Freddie Mac, you may qualify for the HARP program. This maybe an option for you if you feel refinancing or a loan modification is not suitable for your unique situation.

5. Short Sale

If you are unable to find a suitable solution for your home due to your financial situation, this may be the best option to sell your home. Homeowners who are facing financial difficulty often look to a short sale of the property. This will allow the lender to sell the home for less than what you owe on the mortgage in order to get some money back by avoiding a foreclosure on the property. Investors will look to purchase a short sale home because they are able to get a deal on the property and that is why it normally sells quicker than listing the property with a real estate agent.


There are several options available to you to avoid going into foreclosure. Please reach out to us to discuss your unique situation to see if we can provide a solution that works for you. Contact us today to speak to one of our representatives.

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