Should I Stay? (Read part 1 here)
If you want to hold on to your home, many banks are willing to work with you. They offer options such as loan modifications or repayment plans. Sometimes if the financial setback is temporary they will roll the missed payments onto the end of the mortgage so that you will be considered current.
Working with your bank may not be easy, though. You may have already called your bank to see what programs are available to help you only to find them not willing to help. If that happens, go over the heads of the person you spoke to. That person may not have had the authority to help you. Their job may only be to collect payment.
When speaking to the bank, treat it as if you’ve entered into a battle (because you just may have). Take very good notes. Write down the name of the people you speak to, the date and time, and the extension you used to get to them. Write down whatever information you can. You may have to quote someone in the future when someone else tells you something different.
They Want Money!
If you'd like to stay, you will have to show the bank that you are able to make next month's payment. It's seems counter-intuitive - that you'd want to show them why you can't pay. But think about it. They want people who can afford to pay. They are not going to drop your rate or cut your payments. If anything, they will raise your interest rates. They are going to approve modifications and adjustments for people who can make the payments in the future.
Can I Stay?
If you want to stay in your home and continue paying your mortgage but you don’t think you can afford to, you really only have two options - cut your spending, or bring in more money.
Spending less is tough. You've probably already cut out the luxuries. And it's hard to cut when prices are continually rising. There may be small areas where you can cut such as making coffee at home instead of buying it. But is that enough to make a difference?
You may be out there pounding the pavement daily (or less often if you've been unemployed for a while). Are there other options you haven’t tried? Maybe another family member can step up temporarily and get a job – or a second job. Think outside of the box. Is there a room you can rent out? Taking in a foreign exchange student pays a hefty stipend. What about renting out garage space? How about turning a hobby into a business? Or maybe a stay-at-home mom can start offering secretarial services online.
When deciding to say, you have to decide if you want to make these changes for the rest of your life. Your mortgage isn't going to go down so these aren't changes that can be made temporarily while you "get back on your feet". These have to be permanant changes in your lifestyle. Unless you are sure that your income will go back to what it was before the setback, that is.
Comments (4)Subscribe to CommentsComment