If you are laid off or unemployed, unemployment compensation isn't always enough to meet your monthly mortgage payment. You can get help to pay your mortgage, however, from your lender. Mortgage lenders want to avoid foreclosure just as you do, so in many cases, they generally are willing to assist distressed homeowners.
Ask for a lower mortgage payment. Contact your home loan lender and explain your situation. Your lender may reduce your home loan payment for a specified time period until you can get back on your feet financially.
Get a forbearance, which is a measure by which your mortgage lender temporarily suspends your home loan payments, usually for less than six months. This gives you time to overcome a financial challenge and helps lower the risk of foreclosure.
Request a mortgage modification. If you're unemployed, you won't qualify for refinancing your home loan to lower your payments. Instead, you might qualify for a loan modification, in which mortgage lenders alter the original terms of your mortgage agreement to reduce your interest rate or extend your loan's term. In turn, your monthly mortgage payment decreases, helping you to stay current on your mortgage.
Tips & Warnings
- Communication is the key. Contact your mortgage lender at the first sign of financial trouble.
- To qualify for a mortgage modification, you must be at least 30 days behind on your payments.
- To obtain a forbearance, complete an economic hardship form supplied by your lender. They'll inquire about your financial situation; based on your answers, they'll determine whether you qualify for a forbearance.
- Some lenders include "financial hardship assistance" links on their websites. To take advantage of this feature, you typically have to register for online billpay.
- CNN Money; Citi: Mortgage Break to Unemployed; March 2009
- Department of Housing and Urban Development; Loan Modification Frequently Asked Questions; September 2010
- Mortgage Professor; Mortgage Payment Problems -- What if You Can't Pay?; February 2010
- Photo Credit Flickr
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