If you are falling behind on your home payments, don’t worry.
You’re not alone.
In fact, according to the Mortgage Bankers Association, you’re alongside more than three million homeowners who have either missed their payments or are delaying their payments.
If you need to catc up on your mortgage payments to avoid foreclosure, continue reading to find some helpful tips.
Refinance Your Home
If you’re looking to reduce your mortgage payments substantially, you might consider refinancing your mortgage. In many cases, people are able to qualify for much lower interest rates.
Of course, to do so, you’ll need to qualify. Typically, people need a debt-to-income ratio of at least 43% or lower and a credit score above 620.
You may consider switching from an adjustable-rate mortgage to a fixed-rate mortgage if your interest rates are constantly changing. Make sure to consider how much time it will take to recoup any costs you make upfront before you move forward with your refinance.
Modify Your Loan
If you can demonstrate financial hardship in any way, you might be able to modify your loan. Many people apply for forbearance, which temporarily reduces mortgage payments for a particular period. However, forbearances are temporary.
Loan modifications permanently modify current loan terms.
The modification you negotiate for will depend on several factors, so it is important to speak with your lender.
Reduce Other House Payments
Beyond your interest and principal, you’re paying for taxes, insurance, and additional housing fees. If you can’t lower your mortgage payments, you may consider trying to lower these costs instead to give yourself some wiggle room.
Start by trying to lower your insurance bill by seeking out multiple quotes from insurance providers until your find the cheapest rate. You may even consider finding a company that bundles home and auto insurance to help you save even more.
You may also consider checking the value of your home. If you’ve established more than 20% equity in your home, you’re probably eligible to remove private mortgage insurance. Scrapping private mortgage insurance can save you tons of money, and many people never think of doing it.
We recommend contacting your lender to determine if you’re eligible for removing PMI.
Create a Repayment Plan
If your budget has slightly more room to make extra payments over the next few months, you may consider calling your lender and asking if you can set up a repayment plan.
Often, lenders will work with homeowners if the homeowner can prove they have a stable income.
In essence, you can use a repayment plan to spread out your upcoming mortgage payments over the next couple of months to make them easier to pay.
Of course, if you’re so behind on mortgage payments that you’re thinking of selling your home to get the money you need now, we recommend getting in contact with our team here at United Home Offer to see how we can help you sell your home FAST.