What to do with Your Mortgage if You Lose Your Job?

Losing your job isn’t fun, but it could happen. It’s important to be prepared and to know what to do with your mortgage if you happen to lose your job.

Even though the unemployment rate is very low across the nation, in some states, it has gone up. Whether you’re a teacher facing a layoff or your company has decided to downsize, you may be out looking for a job without any idea of how to handle your mortgage. Here are a few tips to help you during this difficult time.

Check the Monthly Budget

Before you do anything else, a budget meeting with your spouse is in order. You need to sit down and comb through all your expenses. It’s important to know how much you have saved and any income that could be coming in from a spouse’s job or another source, as well.

Don’t assume you’ll be back to work right away. Instead, set up a budget for the next three to six months to see what it looks like. It’s better to assume you’ll be without work for many months than to assume you’ll be back to work soon. Prepare for the worst and hope for the best.

Look for Ways to Cut Expenses

Maybe you have a number of things not considered needs in your budget. If this is the case, it may be time to make a few cuts. Maybe you cut down how much you spend on entertainment and other extras, just until you can get back to work.

Talk with your Mortgage Company

After you’ve had a chance to look at the budget and see where you stand, it’s time to speak with your mortgage company. They may be able to help by putting the loan in forbearance for a few months or even allow you to pay smaller payments for a little while.

You can even ask for a loan extension to lower the payments. There are options and it’s better to call and discuss the options now rather than wait until you cannot afford your payment. Sometimes, they will even allow you just to pay the interest until you can get back on your feet.

Check into Government Programs

Another option is to check with the government to see if they offer any help. Sometimes, the federal and local government have programs in place to help with situations where you cannot afford your mortgage. They may also help with utilities or food, which could ease the budget enough to make your mortgage payment more affordable.

Just because you lost your job doesn’t mean you have to fall behind on your mortgage. Contact your mortgage service provider as soon as possible to discuss your situation. They are more likely to work with you if you contact them now compared to waiting until you cannot make the payment on your mortgage.

It’s also a good idea to look at your entire budget and make cuts where you can, especially if you think this could be a longer term thing. Any cuts can help ease the financial stress and help stretch your savings further.