The number of people whose homes have fallen into foreclosure in the past couple years continues to rise, and if you’re finding yourself falling behind on your mortgage, you could soon be one of them. But don’t panic just yet. There are ways to catch back up with your mortgage and keep a roof over your head. So in addition to crossing your fingers and saying a prayer each night, consider this advice- it may help you keep your family’s home.

Get your debts in order. Make a list of every debt you currently have- mortgage, car loan, credit cards, student loans, property tax, etc. Then, prioritize those debts- keeping any that have to do with your house at the top of the list. Put it this way- if not paying off a certain debt may cause you to lose your home, it’s a priority. Coming in at a close second would be your car loan- that is, if you depend on it to transport you to and from the workplace. (If you walk or take public transportation to work, consider selling your car and paying off your car loan, which would leave more funds to focus on debts that include your home.)

Talk to your lender. When the calls and letters demanding payment are piling up, the first instinct is to crawl in bed and pull the covers over your head until they magically disappear. However, resist this temptation and start a conversation with your lender- ideally before you miss a payment. Explain the situation, including what you are doing to rectify it, and ask what he/she can do to help. You might be able to switch to a different loan program or increase the loan time period (i.e. a 30-year loan could be increased to a 35-year loan), among other options. Never stop paying your monthly mortgage completely- being able to pay a portion of the full amount will be seen as a gesture of good faith by a judge if the matter does end up in court.

Contact your insurance agent. Chances are that you were sold an insurance policy along with your house that might include provisions for job loss or illness. If you qualify under one of these categories, you may be able to access that money sooner. Banks may halt the foreclosure process if they know that funds will be available shortly.

Ultimately, the best thing to do in these situations is to try and ride out the storm, as difficult as it may be. The most important thing is that your family has a roof over their head, and you should try everything you can to keep it that way.

Posted in Home Budget

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