June 20, 2018
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Help with your House Payments

My husband and I cannot pay all of our house payment this month. We only have half the money. Is it true that we can pay just the interest and it will not hurt our credit rating? Or can we just add another payment on at the end of the loan?

 Thousands of questions like this are posted all over the internet by desperate homeowners looking for help. The loss of a home is not only financially devastating, but personally devastating as well.   Before you do anything, understand that it’s not up to the borrower to decide what is going to be paid. Blowing off part or all of a payment without the lenders consent will definitely hurt your credit and will probably start the foreclosure process.

Facing Financial Problems

Don’t assume your money problems will quickly correct themselves. Evaluate your situation to determine if you’re facing a temporary or long-term setback. Financial problems are most often associated with the following changes:

·        Loss of job

·        Cuts in work hours or overtime

·        Retirement

·        Illness, injury, or a death of a family member

·        Divorce or separation

 If your family is facing any of these changes and cannot pay your bills, now is the time to look closely at what you owe and what you earn, eliminating unnecessary spending and reaching out for help if you still can't meet your financial obligations. Contact a non-profit credit counseling organization, either in person or over the phone. They can provide valuable information and help with your budget and payments. They have the experience of working with hundreds of creditors to lower interest rates, get fees waived, and lower payments on credit card debt. This will free up some money in your budget to enable you to pay your mortgage and other bills. Taking action now can help you protect your family from the loss of your home.

 The number one thing you must do is call your mortgage lender as soon as you have a problem. Don’t allow your embarrassment to take over. Understand that lenders want to help borrowers keep their homes. Foreclosure is expensive for lenders, insurers, and other investors. In addition, Freddie Mac and Fannie Mae require lenders to work aggressively with homeowners who are facing financial problems. Lenders have options to help you keep your home if you make contact early enough. The farther behind you become, the fewer options are available.

Steps to take when you may be unable to pay your mortgage:

1.      Contact your lender

2.      Talk to a HUD-approved Housing Counseling Agency*

3.      Prioritize your debts

4.      Find out if you’re eligible for disaster relief or military options

5.      Look out for predatory lending schemes—if it’s too good to be true, it is!

* The Department of Housing and Urban Development sponsors certain housing counseling agencies throughout the country that provide free or low cost advice on buying a home, renting, default, foreclosure, credit issues, or reverse mortgages. Search online at www.hud.gov or call 800-569-4287.




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