If you are late on your mortgage you need to act immediately.No homeowner wants to miss a mortgage payment but things happen from time to time that can turn your world upside down. When they happen, the actions you take can often determine how long the situation lasts and how impactful it will be. If you avoid your situation, you will inevitably make the problem worse, and before you know it you will turn one mortgage late into a foreclosure. One mortgage late can be dealt with, but a foreclosure will have a lasting impact on your credit report. Here are four things you should do if you find yourself late on your mortgage:
Evaluate Your Situation. Before you can map out a strategy, you need to figure out how you got in your situation. In some cases, the reason will be straightforward such as a divorce, death in the family, or loss of job. In other cases, you may have simply mismanaged your finances or had to deal with an unexpected short term payment. Whatever the reason, you need to evaluate it head on so you can move forward. A short-term problem could be fixed simply by reorganizing your finances and tightening up your bill payment methods. A long-term problem may need the help of an accountant, attorney, or financial planner to get you back on track. As difficult as this may be, you need to act at the first sign of being late.
Contact Your Lender.After spending a few days evaluating your situation you need to reach out to your lender. If you are currently late you have probably been getting calls that you have avoided for the past couple of days. Now is the time to either answer the phone or call them back. Your lender will provide you with options based on your current situation ranging from loan modification to a deed in lieu of foreclosure. You may be surprised to learn that you have more options than you may think. With the options that are presented, you will know exactly where you stand, what you can do, and what is needed if you want to move forward.
Call Real Estate Agent for Value. Regardless if you want to hold your property or are considering selling, you should have an idea of what your property value is. Now is not the time to take a short cut and rely on a value you find online. A local real estate agent will look at comparable sales, current listings, and other market data to give you an accurate idea of what you can get for your home if you sold it. If there is equity, a sale may be the best course of action. Even without equity you can do a short sale that may help you avoid foreclosure. Don’t wait until you are served with foreclosure papers to contact a real estate agent.
Take Action. The worst thing you can do is put your head in the sand and hope the situation sorts itself out. While the foreclosure process can be delayed if you don’t make your payment eventually the lender will take your property. Whether you want to try a loan modification and keep your property or a short sale and move on from it you need to get the ball rolling on something. Doing nothing will only make the problem worse.
A foreclosure will impact your ability to get credit for the next seven years. Don’t let one missed payment spiral all the way to a foreclosure.