Seeking financial solutions

If you’re finding it hard to make your monthly mortgage payments and pay your other bills on time, don’t delay. The first step is to compare the amount you need to stay up-to-date with your payments with what you have available.

If there’s a gap, can you increase your income or reduce expenses enough to meet your monthly payments? If not, you should act before your situation becomes more serious. The sooner you do, the more time you may have to find potential solutions and keep your home.

Where do you turn?

If you’re in mortgage trouble — ideally before you miss that first payment but even if you’ve already fallen behind by a month or two — it’s best to have an honest discussion with your lender. Knowing all the facts about your situation will help your lender determine which potential solutions may be available for you.

Be sure to gather all facts before your consultation and be candid about your financial difficulties. For example, provide proof that your hours at work were reduced or that you’ve been coping with overwhelming and unexpected medical expenses.

While it may be uncomfortable at first to share the details of your situation, it’s important to remember that your lender wants to do what can be done to make sure you stay in your home and continue to pay off your loan. The good news is that there may be either short- or longer-term solutions your lender can offer you, which can bring relief to your household budget in the form of lower monthly payments.

It’s also important to remember that lenders don’t want to be in the business of owning and maintaining foreclosed homes. The earlier you begin a candid discussion about your financial challenges with paying your mortgage, the more likely it is that a solution may be found.

If you are hesitant to call your lender, you should seek advice from a trusted and knowledgeable third party. You may consider contacting a HUD-certified mortgage counselor, who can provide you with the information and support you need to cope with the challenges you’re facing.

Mortgage counseling

The idea of discussing your financial problems with a stranger might make you a bit uncomfortable, but here are some tips for improving your mortgage counseling experience:

• Find a trustworthy counselor: Seek counseling through a reputable organization. Check with the government’s Department of Housing and Urban Development (HUD) or your local NeighborWorks® organization.
• Be prepared: You should have copies of all your major bills on hand, including your mortgage statement and loan number. This will allow your counselor to get an accurate picture of your financial situation and provide you with personalized advice.
• Be candid: While it’s understandable you may be a bit uncomfortable sharing the details of your financial challenges, remember that the role of your mortgage counselor is to help you, not to judge you. You’ll end up with more accurate advice if you describe your situation as completely and honestly as you can.
• Be realistic: Your counselor has many tools to assist you, and may even be able to help you open the lines of communication with your lender. But he or she can’t force your mortgage company to eliminate debt or offer you a solution.