Well with the costs of living going up, bills and interest rates increases, one day you might find yourself in the situation where you can’t meet your mortgage repayment. Shit!!! What do I do now….. Don’t panic! Also do not wait until you are months behind and the bank is knocking on the door. Go to them explain the situation and see if you can find a solution to the problem. They don’t want you to lose your house or they are also losing a mortgage and years worth of interest. It pays to get on that phone at the first sign of trouble – and keep them in the loop!!!
So what are your options?
Well first you can think about asking your bank to come to a new agreement to meet your current needs. The first option is to simply move the day you mortgage is paid on. If you pay on the off pay week then transfer to the day your pay goes in then you know the payment is made and you can’t accidentally spend the money meant for your mortgage.
The second option is to extend the life of your loan this can reduce the repayment by simply going from 20 year term to 30 year term. This can make the overall cost of the loan higher through increased interest but when you are back on your feet you can pay the extra amount and pay it off early.
The other option is renegotiating the terms of your loan and possibly for the short term switch to an interest only loan.
If worse comes to worst then you may want to think about selling your house before the bank forecloses. If the bank sells the house they will want a quick settlement and sometimes this means it sells for a lot less than it is worth to off load the property. Then you can purchase something a bit more affordable without the weight of the debt on your shoulders.
So don’t simply throw in the keys and walk away. See the problem as soon as it arises and then do all you can to fix it. Do not go down without trying everything you can. Good luck.