When you fall behind on your mortgage payments on your Sacramento home, it can feel like you’re drowning in debt.
Even if you’re able to make your monthly payment, catching up on a past due balance is an overwhelming challenge. Late payments keep accruing and adding to your woes. That’s the bad news.
The good news is there are a few options that can help you to avoid foreclosure in Sacramento. Even if you’re seriously behind on payments, you may be able to hold on to your home. Here are five alternatives to giving your property back to the bank.
How to Say “I’m Behind on My Mortgage Payments”… and Actually Get Help
This is usually the tool of last resort. If you’re being crushed by debt from different sources, bankruptcy can be a good way to negotiate with a lot of lenders at once. It won’t help you avoid your mortgage, but you can free up more cash to make your house payment by eliminating credit card debt and other obligation. Different lenders will treat your circumstances in unique ways. You’d benefit from serious professional help from an attorney.
This can be a good card to play, if you’re going through bankruptcy. Basically, reaffirming the loan is making an additional commitment to pay; you and the lender work out terms and submit them to the court. It allows you to keep your property even as your other debts are being forgiven. In some states where it’s allowed, an affirmation can create additional liabilities if your property is ever auctioned.
3. Making Home Affordable (MFA):
If your mortgage qualifies, you might be able to participate in MHA. Any loans backed by Fannie Mae or Freddie Mac must be considered for MHA, and other lenders choose to participate in MFA.
With MFA, your payments and/or interest rates might be lowered. In some cases, even the principal balance (if your home is worth less than you owe) could be reduced. If you’re unemployed, you might be able to get your payments temporarily suspended or reduced.
MFA is a government program, so be prepared to deal with lots of paperwork. Still, the payout could be well worth it.
4. Negotiate with your bank:
Lots of lenders routinely offer some level of assistance. You have to work hard at it, but you might be able to get your interest rate reduced, or a temporary reduction in your payment.
Most of the time, lenders will want to steer you to refinance your loan – but by the time you’re a few payments behind, you probably don’t qualify for a reduction in interest rate.
If you’re in need of a temporary fix and want to stay in your home, most banks can be forgiving. Sometimes they’ll be willing to add a few months of payments back onto the primary balance of your loan. It’s all dollars and cents to them, so remind them that you need their help to give them a lot more money in the long run. If they have to sell your house at a foreclosure auction, they’ll take a huge loss.
That sounds obvious, but for some reason bankers seem to forget it when saying no to someone in need of help.
5. Borrow money from a private investor:
If you’re behind in your payments and need to sell fast, we can help.
In certain circumstances, we may even be able to help you stay in your home.
We work with homeowners in Sacramento to find solutions to foreclosure problems.
We’ll let you know how we can help.