Stay & Pay
Most people believe they can get a job quickly. If you believe you can do so, you can stay at home and work toward building your future by applying for job after job. If you decide to do so, it is critical that you recognize when you need to take action. You can’t do nothing for too long.
In the meantime, there are a few ways to generate income from your home that could give you some of the support you need right now. The sooner you take action to do this, the better. For example, you may want to rent out a room for a few months to generate a few extra dollars to pay toward the mortgage payment.
Another option is a lower monthly payment. Refinancing for a lower rate could mean a lower monthly payment. If there is still an income coming into the home, such as from a spouse, this could be a viable way to reduce your mortgage costs. If you don’t have an income, though, it could hurt your lender’s willingness to work with you.
There are programs available to help those in need. Some lenders are more than willing to work with you on this. Then there’s the risk of having credit card damage and trying to rebuild your credit after a significant blow to your income. It doesn’t always work out well.
You may be able to get your lender to talk to you about loan modification – a way to change up the terms of your loan to make it a bit more affordable to you. This could work, in some cases, as long as your lender believes you have the ability to keep making payments in the long term. You can also ask for a forbearance. That’s a bit of a break in loan payments. Will the lender allow it? It’s up to them to decide.
When it comes to job loss, mortgage loan payments are going to be hard to make now, but they will also be harder to catch up on later. For this reason, think clearly about this. If you don’t have the ability to get caught up, it may not be an option for you to use any of these programs. Still, it is worth talking to your lender about if you believe you will be in a job soon.
Foreclosure can be devastating. You’ll lose your home to the lender. The lender is going to then resell it. Your credit is going to take a solid hit and will for some time, making it hard for you to buy a new home after you get back on your feet.
However, foreclosure can get rid of a lot of your legal liabilities and can help you to move on. There’s no doubt that foreclosure can be a difficult situation, but for some, it may be necessary.
A bankruptcy filing can be a good option if you need to freeze the financials quickly. However, if you want to stay in your home, you’ll need to prove to the bankruptcy court and the lender that you can do so. Again, you have to count on that job coming through.
Bankruptcy can offer some help if that happens – you’ll be able to get rid of a lot of debt, may get rid of some of the fees and extra costs on your mortgage and you get a fresh financial start.
Sell As Is
Perhaps one of the best solutions is to simply sell your home. You don’t necessarily need to do any type of work to the home – when you are selling as is, the buyer recognizes they need to take on financial responsibility for the home’s condition. Selling your home does a few key things – it gets you out of your loan, it doesn’t hurt your credit, and it helps you to get rid of all legal liabilities with the property.
What options do you have? After job loss, your focus must be on improving your financial health. Selling your home may be one route to take to make this happen, especially when you have a buyer ready to go.