I’m struggling to pay my mortgage. What are my options? Is it worth going back to a high paying job but missing out on time with the kids? Here’s what I suggest:
Q: I need $8,000 to bring my mortgage to date. It costs me $1,000 per month. I have $100,000 in equity. It seems crazy to lose my home, but I can not secure the $8,000 I need to keep from losing my home.
I used to make over $100,000 per year and now I make significantly less. My lesson to my children was going to be that money doesn’t buy happiness. My previous job was stressful and I missed my kids, so I made a life change.
But what I’ve found is money does in fact buy happiness. What can I do?
A: We’re fond of the saying that “money doesn’t buy happiness, but it sure helps.” We’re sorry you’ve fallen on hard times. Unfortunately, we don’t have any good answers for you.
You can try to see if your friends and family are willing to give or lend you that money to pay the lender and keep your home. You can also pivot, try to sell the home and save the equity you have in the home. Or, you can contact the lender and try to figure out if they have a payment plan for you.
When the Great Recession hit, the government came out with HARP and HAMP programs. The Home Affordable Refinance Program is still available through December 31, 2018. The program aims to help homeowners with little or no equity in their homes refinance their homes and give them some breathing room with a new loan. HARP would not work for you, but you can still check out their website and see if there are other factors in your situation that could help you out: Harp.gov.
On the other side of the coin, the Home Affordable Modification Program (www.MakingHomeAffordable.gov) may be able to help. This website, sponsored by the US Department of Housing and Urban Development, can give you useful information on how to benefit from the program. While one of the options might have you to contact your current lender and determine if they participate in HAMP, your lender may have its own program that can assist you in keeping your home. If you are employed and can pay your bills, your lender may be willing to defer some of the amount you owe, have you sign paperwork that can reduce your payments temporarily or come up with a different plan for you.
While it would be good to bring the loan up to current, you should seriously think about selling it. If you bought it when your income was much higher, and now it’s a lot lower, then renting a home that suits your new resources is a smarter move. And, if you can pocket $100,000 in cash, that will go a long way toward helping you feel more secure financially.
The worst thing would be to allow the bank to foreclose. As the foreclosure process continues, the continued increase in the amount owed to the lender (plus interest and fees) will quickly eat away at your equity and when the home finally sells, it might wipe out that equity entirely.
We suggest that if you can’t get the lender to assist you in a program that can suit your budget, you should try to sell as quickly as possible and save as much of the equity as you can for yourself and your family.