Your application for mortgage assistance was rejected!
You figured out a budget. You cut expenses. You renegotiated all your payments. But you still can’t make your mortgage payment. So, you asked the bank for help, and they rejected your request.
When this happens, it typically is because an applicant has too many expenses and not enough income to pay them all, even after the mortgage lender reduces your mortgage payment. So, for example, all your other bills equal $1,000. You make $1,500. Your current mortgage payment is $700. The lender may be able to reduce your payment to $600, but you still won’t be able to afford that. And because of interest rates, costs, etc., they cannot lower your payment to $500.
It’s a tough situation because budgets are somewhat fluid. You figure you can’t afford $700, but you could juggle something to pay that $600. But, the banks don’t see it that way. And when it comes down to it, if you can’t really afford it, a few months down the road you’re going to be stuck.
Time to unload the house
As tough as it is, when you get to this point, it is time to walk away from the house. You can go down a few paths. Some people choose to stick it out until the bitter end. You let the house payments fall further and further behind, go through default, foreclosure, and eventually move out when the bank sells the house. This is the Pray for a Miracle Path. The hope here is that something will change. You’ll get a pay raise, get a better job, win the lottery, or something, and you will catch up. It happens occasionally.
You can sell the house on the market. We’ve talked about these options before. If you have the time, money, and the house is in great shape, list it with a realtor. You might make a little money.
You can sell the house to a cash buyer, like SOS Property Solutions, for a fast, no hassle sale where you get to walk away at no cost.
All of these options are going to pretty much end in the same spot, with you needing a place to live.
Move forward with confidence
While none of this is fun, you are now armed with plenty of information and a refined monthly budget. You know exactly how much you can afford for a home. A lender is unlikely to give another mortgage to you, at least for a few years, so you will need to find a place to rent. Be sure to research places to live that fall well within your budget. Give yourself a little wiggle room. If you can afford exactly $500 a month, see what you can find for $450. Can’t find anything in your price range? Consider the roommate option. If all else fails, never rule out the possibility of moving to a new city. It is a daunting choice, but it could be just the thing you need to start a new life!