Brenda Kellen: What to do when you miss a mortgage payment
July 28, 2008
Q. I just missed this month’s mortgage payment and do not think I will be able to make next month’s either. What do I do?
A. The first step is to contact your lender, explain your personal situation and help the lender understand why you are not able to make the payments.
The lender may have some options:
– Setting up a payment plan for making smaller payments for a short period of time.
– Refinancing to an interest rate or loan program that lowers your payment amount.
– Re-amortizing the loan to lower your payment. (This may have a negative impact on your credit score. Clearly understand the implications of the lenders solution.)
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Secondly, review a monthly budget to decide if staying in your home is going to cause financial strain for a continued timeframe.
If your loan has an adjustable rate and is now hundreds of dollars more per month than you have been paying the past three or five years, look closely at whether or not you can afford to continue living in the home. If you decide to downsize into a less expensive home, contact a realtor to begin the process for listing your property.
Complete a “Sellers Net Proceeds” with your realtor to determine what you need to net from the sale so you do not bring money into closing. Include the missed payments and late fees in your calculations. Price your home accordingly but aggressively. It is crucial to price properly; time is of the essence. Give your realtor written permission to speak with your lender and ask your realtor to call and give weekly sales updates and provide any documentation of the listing the lender may want.
The realtor should document in writing all conversations and provide a copy to you for your files.
If you continue to not make payments, find out what timeline the lender will allow before moving your file to the foreclosure department.
You want to put off this step as long as possible as more fees and charges will be added to your payoff as time marches on.
Communication with the lender is vital.
It is normal to feel apprehensive and nervous when calling and talking to your lender.
Overcome your fears and tackle the challenge.
For more insight into the current real estate market, please contact me directly at (970) 485.1115, visit my website at http://www.gokremmling.com, or e-mail me at firstname.lastname@example.org. I have been working with Omni Real Estate for over 10 years, helping buyers and sellers in both Grand and Summit County.