Income and Mortgage
The thought of losing your home can be terrifying, especially if you’ve been doing your best to make your monthly mortgage payments. Life can take many twists and turns, and your financial situation may change from when you first took out a mortgage. If this sounds like you, don’t fret! With some careful financial planning, you can get back on your feet in no time.
If you have doubts about your ability to afford a mortgage in the long term, then you may want to hold off before purchasing a home. If you already have a mortgage and think that you may experience a decrease in income sometime in the near future, critically analyze your expenses and begin coming up with a revised payment schedule. The sooner you do this, the better!
If your income goes down after taking out a mortgage:
- If you know that your income will go down prior to getting the mortgage, you should buy a home that you can afford. A 30-year mortgage instead of a 15-year may be best for you in order to reduce your monthly mortgage payment. Also, make sure you have at least 6-12 months of living expenses saved for emergencies.
- Keep clear lines of communication with your loan servicer. A loan servicer collects your monthly loan payments and manages your account. There may be more affordable loan options available to you, like HAMP, so make a call to your servicer before it is too late!
- The last option would be selling your house. The value of your home may appreciate, an extra value which could be put towards a new home. Additionally, there are many ways for you to avoid foreclosure if it comes to that