When you fall behind on your mortgage payments on your Phoenix home, it can feel like you’re drowning in debt. Even if you’re able to make your monthly payment, catching up on a past due balance can be an overwhelming challenge.
“I’m already behind in my mortgage payments in Phoenix, what should I do?”
Don’t lose hope! There are several options that can help you avoid foreclosure in Phoenix and maybe even keep your house. Lots of properties in Phoenix have been lost to foreclosure, but there are many ways to avoid it.
What should I do? I’m Behind in my mortgage payments in Phoenix!
1. Bankruptcy: The Last Resort
Bankruptcy is usually the tool of last resort. If you’re being crushed by lots of debt, bankruptcy can be a good way to negotiate with many lenders at once. It is a lot of work, and it won’t help you avoid your mortgage. Different lenders will treat your circumstances in unique ways. You’d benefit from professional help – hire the best you can afford. Bankruptcy can give you a fresh start, but it comes with long-term consequences that can affect your credit score and financial future.
2. Reaffirm: A Double-Edged Sword
Reaffirming the loan can be a good card to play, but it may come with some unseen penalties. Basically, reaffirming the loan is an additional commitment to pay. In some states where it’s allowed, an affirmation can create additional liabilities if your property is auctioned. This means you could still owe money even after losing your home. It’s crucial to understand the legal implications and potential risks before deciding to reaffirm your loan.
3. Making Home Affordable (MFA): Government Assistance
If your mortgage qualifies, you might be able to participate in the Making Home Affordable (MFA) program. Any loans backed by Fannie Mae or Freddie Mac must be considered for MFA, and other lenders choose to participate in MFA. With MFA, your payments and/or interest rates might be lowered – even the principal balance (if your home is worth less than you owe). If you’re unemployed, you might be able to get your payments temporarily suspended or reduced. MFA is a government program, so be prepared to deal with lots of paperwork. It isn’t free money – you will have to work for it. But the effort can be worth it if it helps you keep your home.
4. Negotiate with Your Bank: Persistence Pays Off
Many lenders routinely offer some level of assistance. You will have to work hard at it, but you might be able to get your interest rate reduced or a temporary reduction in your payment. Most of the time, lenders will want to steer you to refinance your loan – but by the time you’re a few payments behind, you probably won’t qualify for a reduction in interest rate. You have to work really hard to negotiate with a bank. Usually, it takes lots of phone calls and the patience of a saint to get through the bureaucracy. Never act rude. Ask for help from everyone you speak with, but don’t sound desperate. Explain your situation, offer supporting documents, and reassure the bank that you want to live in your home for the long term.
If you’re in need of a temporary fix and want to stay in your home, most banks can be forgiving. Sometimes they’ll be willing to add a few months of payments back onto the primary balance of your loan. It’s all dollars and cents to them, so remind them that you need their help to give them a lot more money in the long run. If they have to sell your house at a foreclosure auction, they’ll take a huge loss. That sounds obvious, but for some reason, bankers seem to forget it when saying no to someone in need of help.
5. Borrow Money from a Private Investor: A Quick Solution
If you’re behind on your payments and need to sell fast, we can help. In certain circumstances, we may even be able to help you stay in your home. We work with homeowners in Phoenix to find solutions to foreclosure problems. We’ll let you know how we can help.
Additional Tips and Resources
- Seek Professional Advice: Consulting with a financial advisor or a foreclosure attorney can provide you with personalized advice and help you understand your options better.
- Stay Informed: Keep yourself updated with the latest foreclosure prevention programs and assistance available in Phoenix. Government websites and local housing authorities can be valuable resources.
- Budget and Plan: Create a realistic budget to manage your expenses and prioritize your mortgage payments. Cutting down on non-essential expenses can free up more funds to catch up on your mortgage.
- Community Support: Reach out to local community organizations and non-profits that offer foreclosure prevention assistance. They can provide counseling, financial aid, and other resources to help you stay in your home.
Remember, you’re not alone in this struggle. Many homeowners in Phoenix have faced similar challenges and found ways to overcome them. By exploring these options and seeking the right help, you can take control of your financial situation and work towards keeping your home. Don’t wait until it’s too late – take action now and give yourself the best chance of avoiding foreclosure.