Our economy is improving day by day, but the after-effects of 2008’s mortgage bubble are still being felt by many people. Every day people face the nightmare of foreclosure, damaged credit and difficulty buying a new home or car, or even maintaining a job. It is vital to know what to do and what not to do, should you fall behind on your mortgage.
DON’T Ignore Lender Calls
When you are behind on your mortgage, it can be tempting to dodge those collection calls. After all, you are embarrassed, and frankly if you had the money you would be paying. However, this is the worst thing you can do. If you talk to your lender, you might find they are calling to offer you options to get straight without the damaging effects of being behind.
DON’T Deed Your Property
There are a lot of foreclosure scams out there that promise to fix all your problems if you sign your property over to a third party. Some claim this is a magic fix — that by handing over your house, you will no longer owe the money. Others promise to take over your payments. These claims are almost always scams. Never, ever sign your house over to a third party.
In fact, never let anyone take over your mortgage without express approval from your lender. Only your creditor has the ability to release you from liability, not a third-party miracle-working company.
DON’T Fall for Foreclosure Scams
There are a ton of scams out there designed to steal homes from those who are in a mortgage crisis. Be wary and keep your guard up. If something seems too good to be true, it probably is. Do not be afraid to ask questions and do your homework.
DON’T Sign What You Don’t Understand
Paperwork can be blinding and scary, and for good reason. Contracts and agreements are often full of confusing legalese and are specifically designed to confuse the unwary. If you do not fully understand a document, don’t sign it! Never be afraid to have an own attorney or qualified real estate agent look over any paperwork. Question what you do not comprehend. Remember, ignorance is not a valid defense. Once you sign, a contract is binding.
DON’T Strip Your House
Many people do not realize this, but removing the copper pipe from your home to make a quick buck can be viewed as a crime if not done under the right circumstances, such as after a renovation. Never think that you can simply strip your house to pay a debt. You could end up facing jail time.
DON’T Get Further Underwater
Refinancing your home can be a great idea, but be careful it doesn’t get you further in trouble. Never, for example, refinance your home for more than it is currently worth, and never bow to pressure from a debt collector. Refinancing should be done because it is right for you, not because it is right for a collection agency.
DO Seek Counseling
There are many counseling organizations approved by the United States Department of Housing and Urban Development (HUD), which can provide you with information and help concerning home ownership, including what to do if you have trouble paying your mortgage.
DO Contact Your Lender
You may be surprised to discover that there are options available to save the day. Many lenders will be willing to offer refinancing deals that can significantly lower your monthly payments. Compare the potential of refinance with the cost of your existing loans.
If you can get a lower rate, and a longer repayment term, you might find you are right back in the black. Furthermore, your lender will look very favorably upon you for contacting them immediately and will be far more willing to work with you than if you avoid their calls.
DO Contact Us
The simple dos and don’ts of mortgages basically involve playing it smart and straight. Avoid scams and pitfalls and work with your lender to get right. If you would like advice about dealing with your own mortgage problems, we can help. Contact Salt Lake Homes for Cash for more information today!
Jamie Pelham