Are you saying “Help, I’m behind in my mortgage payments” on your Puyallup 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 can be an overwhelming challenge.
There are a few options that can help you to avoid foreclosure in Puyallup and maybe even keep your house, even if you’re seriously behind in payments. Lots of properties in Puyallup have been lost to foreclosure, but there are many ways to avoid it.
Help, I’m Behind in My Mortgage Payments in Puyallup! 5 Things You Can Do To Help Your Situation
1. Bankruptcy:
This is usually the tool of last resort. If you’re being crushed by lots of debt, bankruptcy can be a good way to negotiate with multiple lenders at once. It’s a lot of work and involves a complex legal process, but it can provide a fresh start by discharging many of your debts. However, it won’t help you avoid your mortgage obligations, and your home could still be at risk if you’re behind on payments.
Different lenders will treat your circumstances in unique ways, and the impact on your credit score can be severe, lasting up to ten years. You’d benefit from serious professional help – the best you can afford. Consulting with a bankruptcy attorney can help you understand your options, the types of bankruptcy (Chapter 7 vs. Chapter 13), and the long-term implications for your financial health.
Before considering bankruptcy, it’s crucial to explore all other options, such as debt consolidation, negotiating directly with creditors, or seeking assistance from a credit counseling agency. Bankruptcy is a significant decision with lasting effects, so ensure it’s the right choice for your situation.
2. Reaffirm:
Reaffirming the loan can be a good card to play, but it may come with some unforeseen penalties. Essentially, reaffirming the loan means you are making an additional commitment to continue paying the mortgage. While this might help you retain your property, it’s important to be aware of the potential risks involved.
In some states where reaffirmation is permitted, it can create additional liabilities if your property is auctioned. For example, if you default on the reaffirmed loan and your property is sold at auction for less than the remaining mortgage balance, you might be held responsible for the deficiency. This means you would owe the difference between the sale price and the outstanding loan amount, potentially leading to significant financial burden.
Additionally, reaffirming a loan can affect your credit score and overall financial stability. If you are unable to keep up with the payments, the negative impact on your credit report can make it more challenging to secure loans or favorable interest rates in the future. It’s crucial to carefully consider your ability to meet the reaffirmed loan obligations before making this decision.
Consulting with a financial advisor or legal expert can provide you with a clearer understanding of the implications and help you make an informed choice that aligns with your financial goals and circumstances.
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 – even the principal balance (if your home is worth less than you owe). 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. It ain’t free money – you gotta work for 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.
You have to work really hard to negotiate with a bank. Usually, it takes lots of calls and the patience of a saint to get through the bureaucracy. Never, ever act rude. Ask for help from everyone you speak with, but don’t sound desperate. Explain your situation, offer supporting documents, and reassure the bank that you want to live in your home for the long term.
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 on 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 Puyallup to find solutions to foreclosure problems.
We’ll let you know how we can help.