In the euphoria of purchasing a home, it’s hard to believe that anything could happen to make you miss a payment on that dream come true, but all too frequently a job loss, divorce, or medical issue happens and you are faced with possibly not being able to pay. I often see people who wonder what to do and have fallen for many of the myths out there. Here are a few of the most common:
I have to be behind on my mortgage before they can help.
This is the one we hear most often, and it is NOT true. While there are a few options that require delinquency, there are many more that do not. The popular Making Home Affordable Program does not require delinquency, and in fact the “little known way to pay off your mortgage” that’s making the rounds on the internet refers to the Home Affordable Refinance Program which requires your mortgage to have NOT been behind in the last 12 months.
I have had a job loss (or divorce, or a specific hardship), surely there is something that I qualify for to help!
While it is true that you must have a hardship to qualify for most programs, that is rarely a sufficient qualification alone. Generally, there has to be a financial hardship where your mortgage is now taking up a large portion of your income and your budget must be able to support the modified payment amount. A HUD-certified counselor can help review you for options or you can contact your mortgage company directly to see which option may suit your situation best.
A modification will drastically reduce my mortgage payment.
While many people do find this to be true, the primary point of a modification is to take the amount you are behind and put it back into the balance, thus catching up the loan without you having to pay it all at once (or have a fantastic credit score to refinance). The payment amount is generally based on your income so it may go down, stay the same, or even go up slightly.
My mortgage company will keep me up-to-date on what’s happening with my assistance request.
It is true that most companies and representatives will try to contact you once a week or so during the request process, but they are not always allowed to leave messages. So, if they need something and they miss you, you may never know unless you contact them yourself. Make it a point to call weekly to check on the status of your request or have the HUD counselor “tag team” this with you. I firmly believe that tenacity is the single biggest factor in assistance approvals!