“The best-laid plans of mice and men frequently go wrong,” says Scottish poet Robert Burns’ famous proverb. The saying is an excellent analogy for homeowners since no matter how much planning and preparation you do, you can always fall on tough times. Fortunately, even if you are having money troubles, there are some excellent ways homeowners can manage their financial stress.
Take a Step Back
Are you in imminent danger of not being able to make your next mortgage payment, or do you have some room to begin making lifestyle adjustments and improving your situation? You can quickly overwhelm both your body and mind if you constantly worry, which does no one any good. Stepping back and taking some time to assess your situation can be a huge help.
Talk With Your Lender
The sooner you act, the better, especially if you need to speak with your bank about potential refinancing or other payment choices. You can’t let your fear of chatting with your lender hold you back in these circumstances because often, your lender wants to help you make your payments rather than deal with foreclosure. When you communicate with your bank, they can offer to refinance your mortgage or give you a forbearance while you reconfigure your finances.
Speak With a Professional
If you think you’re in a position you won’t recover from soon, it’s best to visit a professional debt counselor who can examine your situation and determine an appropriate resolution or direction. The professional may produce a repayment plan that works for every party, including your lenders.
Apply for a Short Sale
Short sales are tricky, as you need to go through certain financial hardships to apply for one. However, if you can’t make your mortgage payments, you can start the process of obtaining one to avoid foreclosure. A short sale is when a financially distressed homeowner gets the approval of their lender to sell their home for less than what they owe. You will suffer significantly less damage to your credit, and you can obtain a new home loan far sooner than if you were to go through a foreclosure.
Recognizing the many ways homeowners can manage their financial stress is significant, whether you’re under economic pressure or want to be as financially literate as possible. Remember that there is always an option and that you aren’t alone.