When purchasing a house or condo for the first time it seems like all the numbers add up. Bills can pile up quickly though, and before you know it the monthly mortgage payment seems like more than anyone should have to pay.
Not being able to afford your monthly mortgage payment can be stressful. You may be trying to figure out which bills to pay. And making decisions such as which is more important to have this month? A house to live in or food on the table…
When you can’t afford the monthly mortgage and maybe facing foreclosure here are a couple of options to consider.
Yes, you can refinance the mortgage to try and get the monthly payments lower. When I bought my house the mortgage company kept on telling me, don’t worry about that monthly payment. In 6 months to a year you can refinance! That will bring your monthly payment down. I thought, great! Sounds good! But here’s where you need to do your homework, because what they don’t tell you is that it costs a lot of money to refinance. About the same amount of money it took to close on the house in the first place. So with that said what’s another option?
Another option would be a short sale. A short sale, simply put is when you sell your house for a lot lower than you paid for it and the lender agrees to take that amount. Why would they do this? The lender, or the mortgage company would probably rather get some money than no money at all. And if they foreclose on your house, the house will go to an auction. The lender won’t get much at auction so it’s a better deal to get what they can get basically.
If your planning on a short sale find a real estate agent or someone who knows what their doing. Someone who has done short sales before. Maybe the real estate agent will agree that if they can’t complete the short sale you won’t owe them anything. Ask them about the process and what you should expect. Ask questions like, If the short sale doesn’t go through will the mortgage company foreclose on me? Or, if the short sale goes through will I owe the mortgage company the remaining balance?
You could also keep fighting for your house. If the house is worth saving, maybe you should try and save it. Maybe get an extra part time job to make some extra money to afford the refinancing. You can make extra money by collecting bottles and cans or write some articles about your experiences and sell them online to websites like this one! Consider renting some or all of the house out until you can afford to live their again. Most houses get more in rent than it costs to pay the mortgage.
Also it’s a good idea to get all of your paperwork in order and filed neatly. Put them in file folders and clearly label them. For example, mortgage, phone, cable, electric, gas, water and so on . Shred anything that is no good in order to prevent identity theft. Yes filing paperwork can be long tiring work but it will be worth it.
So whatever option seams right for you just make sure to do the research. Talk with friends and family to see if they might know of a solution to help you afford the house or condo. Find someone who provides free help or will only charge you if a sale goes through.