If you see meeting your mortgage payment obligations on your home is going to be problematic, the first step is to take a deep breath. There are literally millions of people that face the same problem. You are not a bad person, so leave any feelings of guilt at the door. You do not have time for them. Instead, you need to focus on your options. Fortunately, there are ways to avoid default and keep your home and avoid a mortgage default.

1. Make up Back payments
Your first option is to find a way to make up the back payments and continue fighting to make your payment on time every month. Although not an attractive option, it is an option. Explore options to decrease expenses and increase income, such as an additional job, selling possessions, and look to community resources for help. You may have to temporarily cut back on things like dining out, internet and cable. If you have a basement or spare room you may consider renting it out. The extra income could be up to 50% of your mortgage payment. True, there is some inconvenience, but it is a small price to pay for the extra income.

2. Work with Your Lender
Contact your mortgage lender. Banks do not want to foreclose on your home. The process is long and costly, and in the end, mortgage lenders lose money. Instead, they would rather work alongside borrowers that are slightly behind on payments, and come up with a practical solution. Consider extending your mortgage term to reduce your monthly payments. The downside is that you will end up paying more in the long term. However, if it means you are able to continue meeting the minimum mortgage payments, it is worth doing.

Set up a repayment plan. If you are unable to pay your mortgage payment for one or more months, the lender may agree to a repayment plan. The mortgage lender adds additional money to each subsequent mortgage payment until the loan is up-to-date.

3. Refinance your mortgage.
This is perhaps the easiest and most effective method. If you happen to be on your bank’s existing standard rate, the chances are you will be able to find a much better deal.

4. Talk to a Financial Advisor
If the situation is becoming overwhelming and you are really in danger of defaulting, you may need to consider speaking to a financial consultant or accountant. This will arm you with expertise and resources with which to approach planning your financial future and make the most of your current circumstances.

5. Resell – Downsize.
This option is probably the most drastic and only to be undertaken when the others have failed. If you are able to sell your home, you can temporarily rent somewhere cheaper or buy a cheaper house in a different location. The money saved can be used to pay off your mortgage. This option is not easy, due to the costs involved in moving, but it might be worth doing in the long term.

Author Bio: Peter Diamant is a realtor with Sutton Group-Admiral who specializes in Richmond Hill homes for sale http://www.buysellyorkregion.com/richmond-hill-homes-for-sale.html. and Richmond condos for sale http://www.buysellyorkregion.com/richmond-hill-condos-for-sale.html

Category: Real Estate
Keywords: mortgage payments, avoid defaulting, minimum mortgage payment, back payments, repayment plan