When you fall behind on your mortgage payments on your Phoenix 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 Phoenix and maybe even keep your house, even if you’re seriously behind in payments. Lots of properties in Phoenix have been lost to foreclosure, but there are many ways to avoid it.
Help, I’m Behind in My Mortgage Payments in Phoenix! 5 Things You Can Do To Help Your Situation
Are you in the Seattle Tacoma area and Behind on your mortgage? We are local Seattle Home Buyers. Our customers often ask what their options are when they are behind on their mortgage payments. Read this article for a few tips on what you can to do prevent and avoid foreclosure
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 lots of lenders at once. It’s a lot of work, and it won’t help you avoid your mortgage. Different lenders will treat your circumstances in unique ways. You’d benefit from serious professional help – the best you can afford.
2. Reaffirm:
This can be a good card to play, but it may come with some unseen penalties. Basically, reaffirming the loan is an additional commitment to pay. In some states where it’s allowed, an affirmation can create additional liabilities if your property is auctioned.
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 Phoenix to find solutions to foreclosure problems.
We’ll let you know how we can help.
Have you tried to sell your Arizona home, but you’ve hit some roadblocks along the way? If you’ve found yourself in this situation, then you’ve probably turned to a real estate agent. But, this isn’t always the best option when you want to save money and you need to sell your Arizona home fast. That’s where we step in. We buy houses in Arizona with cash, which means we are able to close quickly and on your schedule. When you work with Freedom Homebuyer, there’s no more waiting around for months for your Arizona house to sell or for the bank to approve your loan.
Call your lender
If you get behind on your mortgage – or sense that you may have financial trouble in the near future – your very first step should be to call your lender. Foreclosure is an expensive process, so most lenders will be willing to work with you if it means they can avoid spending the money. There are two common methods that they use to help you get caught up on your payments.
Repayment plan
The first method is known as a repayment plan. This is a good option if you’ve gone through a temporary financial setback like a job loss, but it’s come to an end. With a repayment plan, the amount that you’ve accrued in missed mortgage payments is split over a set number of months and added to your existing mortgage payment.
Reinstatement and forbearance
With reinstatement and forbearance, your lender agrees to temporarily suspend or reduce your mortgage payments for a certain period of time. At the end of that time period, you’ll be expected to make up for all of your missed mortgage payments with one lump-sum payment. Again, it’s an option that works best if you’re confident that your financial hardship will be resolved by the time your repayment is due.
Change the terms of your mortgage
If you feel that keeping up with your mortgage payments may be an ongoing issue, changing the terms of your mortgage may be a better bet. Again, there are a few different ways to make this happen.
Mortgage modification
Sometimes your lender will agree to modify the terms of your existing mortgage. In this case, you’ll either be given a better interest rate or the lender will extend the length of your mortgage in order to lower your overall monthly payment.
Refinancing
If your lender isn’t willing to adjust the terms of your current mortgage, refinancing might be your best bet. When you refinance, you take out a new loan – one that ends up in a more suitable monthly payment – and use the proceeds to pay off your existing mortgage.
Talk to a HUD-approved counselor
Keep in mind that you don’t have to go through this process alone. If you would like more guidance than your lender can provide, you may want to talk to a HUD-approved housing counselor. They can help you walk through your options and decide which one is the best bet for you. Often, they will offer their services for free or at a low cost.
However, if you choose to go this route, make sure to do your research before you commit to working with a specific counselor. As we said above, you’ll want to choose someone who is HUD-approved. Unfortunately, there are foreclosure prevention scams that you need to watch out for. Be wary of anyone who seems to want to charge you an exorbitant amount in exchange for their services.
Sell your home
If all else fails and you don’t see another way to get caught up on your mortgage, you also have the option of selling your home. Many homeowners in this situation will choose to do a short sale, where the lender agrees to sell the home for less than the amount that you owe in order to avoid foreclosure. Again, you’ll still need to talk to your lender before you can go through with this option.