When we face something unpleasant, our first thought is sometimes, "I'll think about it tomorrow."
But when it comes to telling your mortgage lender that you're having trouble coming up with the money for your monthly payment, the last thing you want to do is put it off. If you're an Ohio homeowner in this position, you must be proactive or face losing your home to foreclosure.
Once you know you're going to miss at least one mortgage payment, call your lender. If you don't apprise your financial institution of your situation and miss a few payments, your loan will be headed to default. And if you ignore calls and letters, you're going to get an "F" – as in foreclosure notice.
A foreclosure sticks with you – seven years on your credit report, in fact, which can keep you from renting an apartment or borrowing money to buy a car.
But by not procrastinating and not being ashamed or embarrassed to have the difficult conversation with your lender, you'll likely find the lender is willing to work with you. They're in the lending, not home-owning, business, after all. The lender doesn't want to foreclose except as a last resort.
Therefore, your lender could offer you a loan modification. The Making Home Affordable Modification Program allows homeowners who meet certain criteria and can show financial hardship the chance to take part in a plan to make their payments affordable.
And even if you don't qualify for that program, there still are ways to avoid foreclosure. The lender might change the terms of your loan, such as extending the life of the loan or reducing your interest rate. Or, the financial institution might allow you to reduce or skip payments for a certain number of months, then repay the amount in arrears over time once you're able to resume making payments.
When you contact the lender, make sure to have all of your financial paperwork ahead of you so you can answer the representative's questions. Take notes of the conversation and write down the names of everyone with whomyou speak.
If the lender is unwilling to work with you, an attorney who works with foreclosure cases could help you find a way to keep your property out of foreclosure and your family safe at home.