Managing Mortgage Payments During Hard Times

Life can throw unexpected challenges at us, and sometimes, financial difficulties are at the forefront of those challenges. Whether it’s due to job loss, medical emergencies, or any other personal or global crisis, managing your mortgage payments can become a source of anxiety. However, facing these hardships doesn’t mean you’re powerless. With the right strategies and knowledge, you can manage your mortgage payments and even avoid potential foreclosure. At BrickWood Mortgage, Inc., we understand the weight of such situations and are here to help guide you through these challenging times with practical solutions and support.

1. Assess Your Financial Situation

Before jumping to solutions, it’s essential to take a moment and understand your current financial state. This will give you clarity on where you stand and what options are available.

• Review your income: If you’ve experienced a loss of income, calculate how much you have coming in and how long it can sustain your living expenses.
• List all your expenses: Create a detailed list of monthly expenses, including your mortgage, utilities, groceries, debt repayments, and other financial obligations.
• Cut back on non-essentials: Temporarily reducing non-essential expenses can free up cash to help with your mortgage payments. Think of things like entertainment, eating out, or shopping.

2. Contact Your Lender as Soon as Possible

One of the most important steps is to communicate with your lender. Ignoring your mortgage payments will only escalate the situation, so it’s crucial to reach out as soon as possible. Many lenders are willing to work with homeowners facing temporary financial difficulties.

• Ask about forbearance or deferment: Forbearance is a temporary suspension or reduction of your mortgage payments, while deferment allows you to pause payments without the risk of foreclosure. Some lenders may offer these options for a set period, helping you get back on track.
• Explain your situation: Be transparent about your financial hardship. Lenders are often more willing to assist if they understand the specifics of your situation.
• Request a payment plan: If your income is still coming in but is reduced, ask for a payment plan that can spread the payments out over a longer period.

3. Look into Government Programs and Assistance

Governments around the world have various programs designed to help homeowners facing financial difficulties. In the U.S., for instance, programs like The Home Affordable Modification Program (HAMP) and The Home Affordable Refinance Program (HARP) provide financial relief to homeowners who are struggling.

• Research available relief programs: Look into whether there are government programs or local nonprofit organizations offering assistance for homeowners. These programs often provide loan modifications or refinance options to help reduce mortgage payments.
• Emergency mortgage assistance programs: Some states and cities have their own programs designed to provide temporary mortgage relief during hard times. If you’re in a crisis, it’s worth researching what might be available in your area.

4. Consider Refinancing Your Mortgage

If you’re in a situation where your mortgage rate is high or if you’re unable to meet the payments, refinancing could be a viable option. Refinancing allows you to take out a new loan with different terms—potentially lowering your monthly payment.

• Lower interest rate: If interest rates have decreased since you took out your original mortgage, refinancing may allow you to secure a lower interest rate, which can reduce your monthly payments.
• Extend the loan term: If reducing the monthly payment amount is a priority, extending the loan term (e.g., moving from a 15-year to a 30-year mortgage) can spread out your payments over a longer period, reducing the amount you owe each month.

However, refinancing may not be an option if your financial situation is very unstable or if you’re underwater on your mortgage (owing more than your home is worth). It’s important to weigh the pros and cons and speak to a mortgage advisor before making this decision. 

If you’re looking to refinance, consider reaching out to our mortgage lenders in South Carolina at BrickWood Mortgage, Inc., who can provide you with guidance tailored to your specific needs and help you explore your refinancing options in South Carolina.

5. Explore Alternative Income Sources

If your financial difficulties are tied to a loss of income, it’s time to explore alternative ways to earn money. Many homeowners have found ways to make extra money that helps them cover monthly expenses, including their mortgage.

• Side gigs or freelance work: If you have any skills, such as writing, graphic design, tutoring, or consulting, you might be able to pick up freelance or part-time work to bring in some extra cash.
• Renting out part of your home: If you have extra space in your home, such as a basement, attic, or even a spare bedroom, consider renting it out. Renting your space can provide steady additional income.
• Sell unwanted items: Another way to raise funds quickly is by selling items you no longer need. Websites like eBay, Craigslist, and Facebook Marketplace are great platforms for selling things you don’t use.

6. Prioritize Your Payments

When you’re in a financial crisis, it’s vital to prioritize your payments to ensure you’re covering the most crucial expenses. Your mortgage should usually be near the top of that list, since falling behind can lead to foreclosure.

• Prioritize essentials: If you’re juggling multiple debts, make sure you’re paying the most important ones first, such as your mortgage, utilities, and food.
• Consider a debt repayment strategy: If you have other outstanding debts (e.g., credit cards, car loans), create a debt repayment plan to help prioritize paying them down while keeping up with your mortgage.

7. Seek Financial Counseling

Sometimes, managing mortgage payments during tough times requires professional advice. A financial counselor can help you assess your situation, create a budget, and explore options for avoiding foreclosure.

• Housing counselors: In the U.S., the Department of Housing and Urban Development (HUD) offers free or low-cost housing counseling services to help homeowners manage their mortgage payments.
• Debt management and budgeting help: Financial counselors can help you create a debt management plan and offer advice on how to best allocate your resources.

Managing mortgage payments during hard times is certainly challenging, but it’s not impossible. The key is to be proactive, stay in communication with the lender, and explore all available options. At BrickWood Mortgage, Inc., we are committed to helping you navigate these tough times and find the best solutions for your unique situation. Call us at (843) 314-4101 today!