Mortgage Payment Protection
What to do when you're having trouble making mortgage payments
Millions of families experience financial difficulties often caused by factors beyond their control. There is no shame in admitting that you or your family is having a hard time paying the mortgage. But, it's important not to dwell on fear of the unknown. Instead, take a series of calm, positive actions that will help get your family back on the road to financial stability.
The first step in mortgage loan protection is honesty with your lender
As with any debt, honesty with the lender and prompt attention to the problem are always the best policies. Lenders understand that borrowers may experience tough financial times at some point during the life of their mortgage. The sooner you engage in open communication with your home loan advisor the sooner they can help you manage your debt. Here are several home loan protection options that may be available to you:
- Reinstatement: This is where you pay entire past due amount including late fees or penalties by an agreed upon date. Reinstatement is a good idea if your repayment problem is temporary.
- Repayment plan: You and your lender set a fixed time to repay what you owe by adding part of your outstanding balance to current payments. This can be helpful if you only missed a few payments.
- Forbearance: This allows you to put your home loan on hold, providing mortgage loan protection for a short period of time. If you are temporarily out of work and need time to get back on your feet, this may be a good option.
- Loan modification: Refinancing may help you restructure payments to adjust the interest rate, loan term or add missed payments into the ongoing payment structure making your mortgage more manageable. There are several government programs designed to help borrowers with this, especially if you can show that you have reworked expenses to do all that you can to make current payments.
Restructure investments to provide mortgage loan protection
In the event you're faced with a sudden cut in household income, an increase in debt, or both, here are a few steps experts recommend you take immediately:
- Put yourself and your family on a strict budget and stick to it
- Review incidental and unnecessary expenses (like cable TV) that can be cut from your budget
- Review your best options for short-term borrowing, especially sources that won't involve penalties (for instance, withdrawing from your retirement account may come with financial penalties). If necessary, consider asking a member of your extended family for a loan.
- Consider various avenues by which family members can possibly supplement the household income
- Contact a certified credit counselor. They can help sort through your financial obligations and possibly contact creditors on your behalf to explore the possibility of temporarily reduced payments
By calmly and diligently tackling these steps, homeowners can regain control of their financial life and begin repaying their mortgage debt. Once you get into good financial habits, you can focus on building mortgage payment protection for the future.
Consider government programs designed to provide mortgage loan protection
If you find yourself unable to meet payments after restructuring your finances as mentioned above, avoid foreclosure by working with government mortgage payment protection programs. Through the Making Home Affordable Modification Program (HAMP), the Home Affordable Refinance Program (HARP) or HOPE for Homeowners (H4H) program you can work with your lender to discover affordable solutions for your mortgage payments.
Discuss Citizens Bank home loan protection options to avoid foreclosure
If you're having trouble making payments there are several other home loan protection options to consider before foreclosure. Record your income and expenses, calculate any equity in the home, and talk to a Citizens Bank home loan advisor about your options. Contact us at 1-888-514-2300 for more information on mortgage payment protection including refinance options.