Don't Wait to Address the Problem

One of the most important steps you can take after losing your job is to review your finances right away. Look at your savings, severance, unemployment benefits, and any other available income to determine how long you can continue covering your essential expenses.

Create a realistic short-term budget and prioritize your housing payment along with other necessary expenses. If you believe you may have difficulty making your next mortgage payment, don't wait until you are several months behind before asking for help.

The sooner you communicate with your mortgage servicer, the more time you may have to understand and evaluate potential assistance options.

Contact Your Mortgage Servicer

Your mortgage servicer is the company that manages your loan and receives your monthly payments. It may be different from the lender or mortgage broker that originally helped you obtain the loan.

When you contact your servicer, explain your situation honestly and ask what assistance programs may be available. Depending on the type of loan, the servicer, and the circumstances of your hardship, several options may be considered.

Mortgage Forbearance

Forbearance may temporarily reduce or pause mortgage payments for an approved period. It can provide short-term relief while you look for new employment or stabilize your finances.

However, forbearance does not erase the payments that were postponed. Depending on the agreement, the missed amount may need to be repaid through a repayment plan, a lump-sum payment, or another arrangement.

Make sure you understand exactly how and when postponed payments will become due before accepting a forbearance plan.

Loan Modification

A loan modification changes the existing terms of a mortgage to make the payment more manageable for a borrower experiencing a longer-term financial hardship.

Depending on the circumstances, a modification may involve changes such as:

• Extending the repayment term

• Adjusting the interest rate

• Changing other loan terms

• Addressing certain past-due amounts

Modification requirements vary, so your servicer can explain whether you may qualify and what documentation is required.

Repayment or Reinstatement

If your financial hardship is temporary and your income has recovered, your servicer may offer a repayment arrangement that allows you to catch up on missed payments over time.

Another possibility is reinstatement, which involves paying the amount owed by an agreed-upon deadline. This may be an option for homeowners who expect to have sufficient funds available to bring the loan current.

Could Refinancing Help?

Refinancing can sometimes reduce a homeowner's monthly mortgage payment, but it may not be practical immediately after a job loss.

A refinance generally requires borrowers to demonstrate sufficient income and meet credit and other qualification requirements. If your income has been interrupted, qualifying for a new mortgage may be more difficult.

If you have already returned to work and your financial situation has stabilized, however, it may be worth discussing whether refinancing makes sense based on current rates, your existing loan, and your long-term plans.

A mortgage professional can help you determine whether this option is worth exploring.

Consider Whether Selling Is the Right Choice

If unemployment is expected to last for an extended period or maintaining the mortgage is no longer financially sustainable, selling the property may be another option to consider.

Homeowners who have built significant equity may be able to sell the property, pay off the existing mortgage, and use any remaining proceeds to help establish a new financial foundation.

Before making that decision, consider the home's current market value, outstanding mortgage balance, selling costs, and your expected financial needs. A real estate professional can help you evaluate the local market and determine whether selling could be a practical solution.

What Should You Do First?

If you lose your job while carrying a mortgage, focus on these immediate steps:

1. Review your finances. Determine how much cash and income you have available.

2. Create a temporary budget. Prioritize essential expenses, including housing.

3. Contact your mortgage servicer. Ask about hardship assistance before falling significantly behind.

4. Understand your options. Review the costs, requirements, and repayment terms of any assistance offered.

5. Get professional guidance. Consider speaking with your mortgage and real estate professionals before making major financial decisions.

Protecting Your Home Starts With Taking Action

A job loss can be overwhelming, but ignoring the situation can make it harder to find a workable solution. Early communication gives you more time to understand your choices and determine which path best fits your circumstances.

At Premier Plus Lending, our loan officers can help homeowners understand their mortgage options and determine when it may make sense to explore refinancing or other financing strategies. While your mortgage servicer will handle hardship assistance on your existing loan, having a knowledgeable mortgage professional available can provide additional perspective as you evaluate your next steps.

If you've experienced a change in income and have questions about your mortgage or future financing options, connect with a Premier Plus Lending loan officer for personalized guidance.