If you were recently laid off or received a cut in your work hours, one of your primary financial concerns is likely having enough money to pay your mortgage. There are options for ways to avoid the repercussions of missing or making a late mortgage payment. Here are some tips for what to do if you lost your job and can’t pay your mortgage:
Should I Notify My Mortgage Company That I Lost My Job?
You should immediately notify the lender of your mortgage as soon as you lose your job. The earlier the mortgage company is made aware of the situation, the more options you will have available. Sometimes your lender will offer provisions for those with temporary financial hardship. You could potentially be eligible for a mortgage forbearance. This will allow you to postpone or reduce payments for a brief period of time while you secure another job or sort out other finances. This does not provide a permanent solution and does not forgive you of the money that is not paid during the forbearance. The payments will have to be repaid eventually.
Another option to consider is modification of your current mortgage. This could reduce the amount of each monthly payment, but will lead to a greater overall cost due to interest. Mortgage modification could be a wise decision for someone who needs a more permanent solution after losing a job. It might be the right step to avoid foreclosure.
If You Are Having Difficulty Paying Your Mortgage Due to the Coronavirus
At this time, many have been let go from work as a consequence of the current global crisis. The U.S. government has enacted mandates to protect those who have been financially impacted by the pandemic. The CARES Act was issued and gives every homeowner with a government back mortgage the right to a forbearance until December 31, 2020, or up to 60 days after the end of the federal national emergency (depending upon whichever comes first). This allows a homeowner to defer mortgage payments for up to 180 days without being punished by late fees or delinquency. This forbearance is not automatic and must be requested.
Federally backed mortgages include the following:
- Frannie Mae
- Freddie Mac
- Veterans Affairs
- The U.S. Department of Agriculture
- FHA
Even if your mortgage is not federally held, some private mortgage lenders are abiding by this mandate as well. Contact your mortgage company to see if you are eligible for this benefit.
What Happens If You Can No Longer Pay Your Mortgage?
If you are unable to make your next mortgage payment and have not requested a forbearance, you could be faced with severe consequences. A traditional mortgage includes a payment due date on the first of the month. Many mortgages contain a 15-day grace period in which you can submit your payment without receiving any penalties. If a payment is received 30 days after the due date, you will be charged late fees and your credit score could be negatively affected. The longer you wait to make a payment, the greater the impact could be on your credit score.
Consider Selling Your Home to a Professional Real Estate Investor
If you foresee that it will be difficult to continue making payments toward your current mortgage, another option is to sell your home and relocate your residence. This could help you avoid having to request a forbearance and put off payments. In addition, you will not risk a missed or late payment, causing negative consequences on your credit score. If you decide selling your home is the best option for your situation, it is best to act quickly for the opportunity of a better outcome. There are several ways you can go about selling your house after losing your job. In order to close on your house fast, one of the best methods is selling your home directly to a real estate investor.
Selling your property to a professional home buyer will allow you to avoid dealing with a real estate agent, showings, or repairs. Professional home buyers will purchase a house in any condition. The process is also quick, granting you the ability to close on your house fast and move on to a different living situation. Additionally, it may leave you in a better financial position than before.
Pavel Buys Houses is a professional, licensed cash home buyer that can purchase your property no matter what circumstance you are in. If you are looking to sell your home quickly, we can discuss your situation with you. We offer free consultations and can present you with a fair cash offer. Contact us today!