Keeping Your Home After Job Loss
Buying a home is an essential part of the American Dream. It is the biggest investment you will ever secure for your current family and for future generations down the line. In the unprecedented event that you lose your job, it could be detrimental to even think about losing your home as well. We hope you never find yourself in this situation, but if you do, realize that you have several options to keep you afloat.
The most proactive step you can take after a job loss is to stay in communication with your lender. As soon as you know you are unemployed, inform them. Keeping them in the loop will be a key factor in how they decide to proceed. It is in your and your lender’s best interest for you to keep your home. However, once you are delinquent on several payments, it can be very difficult for them to empathize with you.
If your financial hardship caused you to miss a few payments but you were able to recover quickly, you may be interested in discussing a reinstatement agreement with your lender. This assumes that you had no problems making on time payments in the past and the lender is confident in your ability to pay in the future.
What if you know it’s going to take a while to get back on your feet after your job loss? Think about researching a forbearance plan, meaning that your lender granted a temporary halt on your mortgage payments for a certain amount of time. Again, this is only a foreseeable option if the lender is confident you will make on time payments in the future, including any interest, fees, or penalties that may have accrued in the time while your loan was in forbearance.
Loan modification is your third option. In this case, a lender will agree to change the tenets of the loan, possibly lowering the interest rate or mortgage payment. A loan modification is rare, and you must show high amounts of financial distress to qualify.
Chapter 13 Bankruptcy
This path is not recommended if you can help it, but if you are drowning in debt and don’t see yourself recovering anytime soon, then Chapter 13 bankruptcy may be fitting. Once you have legally filed for bankruptcy, the government cannot go after you for your home. However, bankruptcy is serious and will leave derogatory marks on your credit report for years to come.
Unprecedented job loss is something we don’t expect, but can happen. The Credit Care Company is here to aid you in repairing your credit so you can go back to living a normal life. If you find yourself in a difficult situation where you may lose your home, please do not hesitate to contact us.