What Happens If I Can't Pay My Mortgage Anymore?

I’m always on the hunt for relevant info and I loved this - one of the best articles I’ve seen on this topic for a while. Here are a few paragraphs as a taster...

One question I get from people who are about to buy a home is about what happens if they cannot make their mortgage payments anymore. Buying a home is a big commitment and it locks you down to a specific geographic area. But it also commits a solid portion of your income to the mortgage payments each month. It is a bit different than not paying your rent, because it can have a bigger affect on your credit score.

What Happens When I Cannot Make My Mortgage Payments? 

When you cannot make your payments, your loan will go into default. The loan company can then take the home back from you and you are evicted from the home. This may sound like the solution to the problem, because you no longer live at the home. However, this does not mean that you are not responsible for the remainder of the loan. Generally, the banks will sale the bank owned property and you will be responsible for paying off the difference in the selling price and what you still owe on the loan. This means that if your home went down in value or if you borrowed the entire cost of the home that you could end up owing money on your home after it is sold. This can have a lasting effect on your credit.

What Can I Do If I Am Having a Hard Time Paying My Mortgage? 

If you are having a difficult time making your payments, you should contact your mortgage company right away to see if there are any programs that may be able to help you.

You may be able to qualify for a temporary payment reduction or to refinance for a lower payment depending on where you live, and if you are past due on the loan or not. If you finance the loan so that it is longer, you can lower your monthly payment, but this does increase the amount of interest you will pay over the life of the payment.

Pretty valuable stuff, I’m sure you’ll agree! Why not check out the whole article here and share your thoughts with me afterwards: call (0403) 296-221 or email me at [email protected] 

Thanks,

Tammie