The current recession, made deeper and longer by the mortgage crisis and severe joblessness, has resulted in skyrocketing foreclosure rates. If you feel that you may be in danger of losing your home, here are a few tips to help you avoid becoming another casualty of the “mortgage meltdown”.
Most importantly, pay your mortgage first each month. Many people make the mistake of paying all of their smaller bills before the mortgage, leaving them high and dry when it comes time to pay the monthly mortgage bill. Utilities, however, are generally restricted by state laws from shutting off your service if you become delinquent, particularly if you have small children, elderly or disabled persons living in the household. Your best bet, however, is to call each utility and talk to them before this becomes a problem. Most will put you on a payment plan for a period of time, erasing the fear that your services will be shut off.
Talk with your mortgage lender before you miss a payment. Find out what your options are early on, before you get behind on payments. Once you are thirty days late, you are considered delinquent and the trouble starts. Get the business card of the person you meet with, so you have a point person in case your financial situation worsens. Banks often look more kindly upon borrowers who make the effort to set up a contingency plan in this manner.
Take a good, hard look at your expenses. What can you cut out of your budget to stretch your money a bit further? If you have a cell phone and a landline, get rid of one of them. Ditto goes for cable TV; borrow movies from the library instead. Slash the entertainment budget, if you haven’t already. Cancel the gym membership and work out at home. Nobody said the Great Recession was going to be easy!
Get a part-time job to supplement your unemployment benefits. Most states allow this, and will deduct a portion of your earnings from your weekly benefit check. Usually, this will extend the length of time for which you will be able to collect. Don’t be too particular about the work; sometimes it only takes a few hundred dollars per month to save a family from financial ruin.
A few more ideas to consider:
* Check at the unemployment office to see about any extensions that may be on the horizon. Also ask about retraining opportunities; these usually add several weeks onto your benefit year.
* Don’t be proud. If you think you may qualify for food stamps, inquire about it. After all, that’s why the program exists!
* Don’t rely on government programs to help you. Despite the efforts of the Obama administration, very few distressed homeowners have actually been helped.
* Remember that the banks are still very powerful. You will need to rely on your own determination and resourcefulness to avoid becoming another statistic.