Things You'll Need:
- Your Brain
- Some Willpower
-
Step 1
Fighting with mortgage payments.
In a recent survey by the National Foundation for Credit Counseling, 10% of respondents said they were late or missing a mortgage payment last year. Tough times prompt tough questions: Can you afford to stay? Can you afford to move? Here are some tips to avoid emotional damage and losing your home: -
Step 2
Know your basic costs of home ownership.
Do you have too much money tied to your home? Most personal finance experts say your mortgage should not exceed 25% of your take-home pay. Add taxes, insurance and association fees, plus maintenance and repair costs, and you'll be surprised how much you spend on your home. -
Step 3
Put your mortgage under a magnifying glass.
The homeowners with adjustable interest rate loans are at the greatest risk. Ask your lender about converting your loan to a fixed-rate mortgage. If they don't cooperate, go elsewhere. Remember, banks are worried about mortgages these days, too. Even if your credit score is favorable, do not expect a fantastic rate. Remember, your priority now is not the rate, you're looking for a way to keep your mortgage from soaring to levels that are unaffordable. -
Step 4
How low can your price go?
In neighborhoods where houses sold in a few days last year, there are homes now sitting on the market for months. If you're in a market where home values have decreased and if you decide to sell your house, remember that buyers expect big price reductions. -
Step 5
Think twice before borrowing.
A home equity, consolidation or personal line of credit loan could help get your bills paid if money is tight, but it is a temporary solution that leaves you with more debt, adding to the financial burden you already have. -
Step 6
Prioritize your expenses.
If you are financially uncomfortable, or if you have major life events on the horizon - marriage, children, changing jobs - get a handle on your finances now. Separate needs from desires and build a cash reserve. -
Step 7
If you can't make it work, get help.
Ignoring the problem will not stop a foreclosure. The foreclosure process is expensive for lenders, so they generally want to help. The sooner you call your mortgage company, the better.
