Job security is not something everyone can count on. After all, you can lose your job at any time for any number of reasons. And if you don’t have a steady paycheck coming in each month, you’ll quickly find yourself having trouble paying the bills, not to mention the mortgage.
Even if you’re collecting unemployment, there might not be enough money to cover your monthly expenses. Worse yet, those benefits will run out at some point, leaving you with no incoming money at all.
Let’s be honest.
No one wants to think about losing their home during tough financial times. But ignoring the issue and hoping it will work itself out is not going to help.
But don’t worry, if you’ve lost your job and can’t pay the mortgage, you don’t have to panic about worst case scenarios just yet. There are several strategies that can help you, and we’re going to share them with you.
Strategies to Help When You’ve Lost Your Job and Can’t Pay the Mortgage
1. Contact Your Lender
The first thing you should do if you find yourself behind on your mortgage payments is contact your lender. Again, ignoring the issue, phone calls, and letters will not help your situation. And if you reach out to your lender for help, you might find them to be more willing to work with you.
Here are some of the ways a lender can help:
- Payment Plan: your lender may agree to a payment plan so you can repay the missed mortgage payments over a period of time.
- Forbearance Program: lower or suspend your mortgage payments for a short time and give yourself time to catch while you find more work.
- Refinance: lower your mortgage payments so you can afford them and keep your house.
The sooner you reach out to your lender, the better off you’ll be in the long run.
2. Get Help from Other Agencies
If your lender is unwilling to help, and your mortgage is insured through or guaranteed by a government agency, you can try getting help from them. Using an agency to help may afford you a lower interest rate, a loan extension, or even a lower loan principle.
Examples of agencies that offer help to those who lose their jobs and need help with mortgage payments include:
- Fannie Mae
- Freddie Mac
- Federal Housing Finance Agency (FHFA) Program
- Home Affordable Refinance Program (HARP)
- Hardest Hot Fund (HHF)
- Banks such as Citigroup, Chase, and Bank of America
Many of these programs are designed to help those that are unemployed and can’t pay their mortgage.
3. Check Your Insurance
You might not realize this, but some insurance policies will cover payments if you’ve lost your job and can’t pay the mortgage.
If you have mortgage protection, you can expect coverage for things like the mortgage, tax, and homeowner’s insurance payments. Of course, you will have to meet the criteria outlined in the policy. For instance, you will have had to have lost your job within a certain time period after buying your house. In addition, the payment amount covered, as well as the length of time benefits will last, will be there too.
This solution is only good for the short-term, as your mortgage insurance will only last so long. However, it’s a great way to get a little bit ahead if you find yourself in financial trouble.
4. Earn Money Outside of Employment
There are some creative ways to earn extra cash on the side while you’re out of a job.
For example, you could have a garage sale and sell household items you no longer need. People are always on the hunt for a great deal. Getting rid of items you have stashed away in the attic, basement, or garage are perfect for freeing up space in your house and generating money.
For larger items, you can always run an auction on eBay or an ad on Craigslist, so you can make even more money.
Another creative strategy is to rent a room in your house. If you have a spare room in your house, consider renting it to a trusted friend or family member. From there, take the rent they pay each month and add it to your mortgage. This is especially helpful if you’ve had a loan modification and your payments have been lowered.
And remember, renting out a room in your house is a temporary solution. You only need to do it long enough to get yourself back on track with a job and recurring income.
5. File Bankruptcy
Though this is not always the most welcome solution when you’ve lost your job and can’t pay the mortgage, sometimes filing for bankruptcy is the only way out.
Declaring bankruptcy is a serious financial decision and shouldn’t be taken lightly.
That said, there are two types of bankruptcy you can consider filing if you’re in desperate need of help:
- Chapter 13: If you qualify and have some sort of income coming in (e.g., your spouse is working, but you’ve lost your job), Chapter 13 bankruptcy will help you stop foreclosure proceedings and keep your home. The drawback is you must agree to put any future income towards paying off what you owe. The repayment plan in place will be determined by the court.
- Chapter 7: Chapter 7 bankruptcy will halt foreclosure proceedings and buy you time to work with your lender or save money to find a new place to live.
If filing bankruptcy is something you’re considering, make sure to enlist the help of a professional.
6. Sell Your House As Is
If you’re in serious financial trouble because you’ve lost your job and can’t pay the mortgage, have a tax lien on your house, and don’t want to declare bankruptcy, you can always sell your house for fast cash.
Sometimes selling your MN home is a better option than losing it to foreclosure. And it sure beats bankruptcy.
In fact, selling your home as-is is beneficial because it:
- Gives you a quick way to get out of your house before you lose it to foreclosure or a short sale and ruin your credit for many years
- Lessens the stress of having to sell your home the traditional way, complete with listings, showings, and real estate agents
- Includes a painless home evaluation and a simple all-cash offer that you can accept or reject
- Offers you a way to sell your home without having to clean the home or make any repairs or renovations
Lastly, selling your home to a company, such as Homestead Road, removes the fear your home won’t sell because they’ll buy your house no matter the condition or circumstances.
Are you looking for an easy way to sell your home as-is after you’ve lost your job and can’t pay the mortgage? Get in touch with Homestead Road today and see how we can help.
At Homestead Road, we know that sometimes life can be tough, and that losing a job is an unexpected thing that happens to many people. We also know that sometimes the best way out of a situation like this is to sell your home as quickly as possible. Because of this, we strive to provide a transparent, no-pressure offer that will ease the tension unemployment and missed mortgage payments can bring to you and your family.
So, request a no-obligation cash offer from Homestead Road on your Minnesota home now, so you can focus on more important things like finding a new job.