Usually one has somewhat of an advance notice that they’re going to miss a mortgage payment, so before that happens and the bank comes to take your house away, Kiplinger’s advises calling up your lender and discussing one of these four options:

Refinance: Replace your mortgage with one with more favorable terms. A lower interest rate, extending the term, or switching from an adjustable to a fixed rate loan are common options.

Forbearance: A temporary reprieve from payments which you either make up later or tack on to the end of the loan

Loan Modification: Lender temporarily reduces the interest rate.

Short-Sale: Lender cancels your debt in return for the money from selling your home.

Kiplinger’s notes that lenders might not change your loan terms until you’re 30 or even 120 days late on your payments, for legal and tax reasons.

Also, certain states, like Massachusetts, also offer mortgage relief programs that lets owners request extra time to avoid foreclosure.

Having a foreclosure on your credit report gets filed under payment history, which accounts for 35% of your credit score. Plus, would you really want to put yourself in the same league as this jackhole? — BEN POPKEN

What to Do If Your Home Is on the Line [Kiplinger’s]
(Photo: Getty)

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