I Lost My Job, Should I Sell My House?

Losing our job can be a frightening situation. You won’t have enough money to pay your bills and insurance. For those who own a home, it would be impossible to continue paying your mortgage if you do not have a steady source of income. However, working together with your lender will help you take advantage the several options available.  

Things You Should Do Once You Lose Your Job

Individuals who lost their jobs would immediately think about applying for unemployment. Unfortunately, you need to complete the required number of hours to be eligible for this program. The unemployment benefits will be considerably lesser compared to your average salary, but it can still help you save your house.

Loan Modification

There might still be a way to save your house even if you lost your job. Contacting the lender immediately after losing your job will give you the opportunity to save your property. Mortgage lenders can offer an array of loan modification programs that will reduce your payment temporarily or permanently. For instance, refinancing may help you lower your interest rate by extending the payment terms. Unfortunately, for this to work, you need to have a decent household income. Forbearance As we mentioned above, loan modification is only for those people who have a household income. In case your salary is the sole source of your household income, then loan modification will not be possible for you. Nonetheless, you might still want to talk to your lender about forbearance. This means that your bank will allow you to skip amount of payment. This may give you enough time until you find your next job. However, the interest will keep piling up.  This will, however, avoid the foreclosure process.

Selling the House

In case you have already considered all your options, but you still can’t settle your bills, then it may be the perfect time to sell your house now. This might be a better option especially if you want to avoid bankruptcy and foreclosure. Declaring bankruptcy will severely affect your credit for 10 years that will affect your ability to apply for future credit. In case you have a large house, you might want to think about downsizing by moving to a property that fits your budget. You can use the profit that you make until such time that you find a new job. It can also help you settle the payment needed for the smaller house. During these instances, time is crucial to avoid foreclosure. Selling your house in the traditional manner by seeking the help of a realtor is not an option since it will take months (probably years) to complete the entire process. By that time, there is just no way for you to delay foreclosure. Cash buyers may be the best option for you. You will be able to close the deal in just a few days. Furthermore, you will not have to incur expenses for the repair and renovation of your house. You will be able to sell your house in its current state.