The Consumer Financial Protection Bureau reports that more than 11 million families are at risk of losing their homes throughout the country. 2 million homeowners are behind three or more months on their mortgage payment and the agency estimates that homeowners owe almost $90 billion in missed payments. These numbers are staggering and may leave some homeowners overwhelmed and concerned.
But there are options.
One is to refinance. It is important to carefully review the offered terms before moving forward with this option. Although a smaller monthly payment is the goal, it can come at a cost. If interest rates are high, the length of the loan could increase meaning that over time you pay significantly more for the home. Take a moment to crunch the numbers and discuss whether or not this is the right option for your financial future.
Those who chose to move forward with refinancing their mortgage should keep in mind that even though you are not technically buying a home, closing costs still apply. This can add 2% to 6% to the cost that you are borrowing. It is also important to shop around. Get estimates from at least three different lenders before choosing which to go with. Gather necessary financial documents and schedule needed meetings. Once decided, the process generally takes a little over a month.
Another option is a loan modification. This can lead to a change to the original mortgage terms, instead of a whole new mortgage. An attorney experienced in real estate loss mitigation can review your situation and discuss these and other options in more detail.