It’s no secret that the housing market has taken a tumble in recent years, with more and more people finding themselves in foreclosure. But what you may not know is that there are several unexpected things that can cause your mortgage to go into foreclosure. So, if you’re at all worried about losing your home, it’s important to be aware of the following potential pitfalls.
- Job loss– Obviously, if you lose your job, you’re going to have a hard time making your mortgage payments. But what you may not realize is that even a significant pay cut can put you at risk of foreclosure. So, if you’re worried about losing your job, it’s important to start looking for other work right away.
- Illness– If you or a family member gets sick, the resulting medical bills can quickly put you in debt. And if you’re unable to work because of your illness, you may find it difficult to make your mortgage payments. The best way to protect yourself from this possibility is to get health insurance.
- Divorce– Unfortunately, divorce can often lead to financial problems. If you and your spouse can’t agree on who will make the mortgage payments, you may find yourselves in foreclosure. So, it’s important to try to work out an agreement before things get too messy.
- Death– If the breadwinner of a family dies, the surviving spouse may find it difficult to make the mortgage payments on their own. If you’re worried about this possibility, it’s important to have life insurance. You may also want to consider getting a reverse mortgage, which can provide you with extra cash if you need it.
- Natural disasters– If your home is damaged by a fire, flood, or other natural disasters, you may find yourself unable to make the repairs necessary to keep it livable. In this case, you may be forced to sell your home to pay off the mortgage. You can protect yourself from this possibility by buying homeowners insurance.
- Personal problems– If you have a gambling problem, get into debt or experience any other personal problems, you may find it difficult to make your mortgage payments. In this case, it’s important to seek help from a professional to get your finances back on track. You may also want to consider getting a co-signer on your mortgage.
- Change in income– If you or your spouse experience a change in income, it may be difficult to make your mortgage payments. This can happen if one of you loses your job, gets a pay cut, or has to take a leave of absence from work. If you’re worried about this possibility, it’s important to have an emergency fund to cover your mortgage payments.
- Change in the family situation– If you get married, have a baby, or experience any other change in your family situation, you may find it difficult to make your mortgage payments. This is because your income may change or you may have to take on additional expenses. If you’re worried about this possibility, it’s important to have a budget and to make sure that your mortgage payment is affordable.
- Change in the housing market– If the value of your home decreases or the interest rates on mortgages goes up, you may find it difficult to refinance your mortgage. This can lead to a foreclosure if you’re unable to make your payments. You can protect yourself from this possibility by staying informed about the housing market and by refinancing your mortgage before the interest rates go up.
- Fraud– If you’re a victim of fraud, you may find it difficult to make your mortgage payments. There are lenders like multifamily lenders, who are experienced in helping people who have been victims of fraud. You can also protect yourself from this possibility by being careful about whom you do business with and by reading all the fine print before you sign any documents.
These are just a few of the things that can cause a mortgage to go into foreclosure. If you’re worried about losing your home, it’s important to be aware of these possibilities and to take steps to protect yourself. For more information, you can speak to a multifamily lender about your options.
