Episode•September 5, 2023•15 min

Can't Pay Your Mortgage? A Guide to Dealing With Mortgage Crisis | Ep. 260

Worried about not being able to pay your mortgage? Don't fret! Tiffany Grant has come to the rescue with her expert advice on what you can do. From loan modifications and refinancing to short sales and forbearance, she'll give you all the options you need so that foreclosure can be a last resort. Plus, learn how to take advantage of government programs and seek help from financial counselors for even greater peace of mind. Listen now for the best tips on dealing with a mortgage crisis! Every Tuesday, Tiffany answers one of your submitted questions. To submit a question for an upcoming episode, visit here: https://www.moneytalkwitht.com/asktiffany Need a second opinion? Don’t hesitate to schedule a consultation with me to explore your options: https://academy.moneytalkwitht.com/15-minute-consultation. Connect with Tiffany Website: https://moneytalkwitht.com Facebook: Money Talk With Tiff Twitter (X): @moneytalkwitht Instagram: @moneytalkwitht LinkedIn: Tiffany Grant YouTube: Money Talk With Tiff This podcast uses the following third-party services for analysis: Podcorn - https://podcorn.com/privacy OP3 - https://op3.dev/privacy

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Key Takeaways

1
Contact your mortgage lender first—they want to help you stay in your home
Lenders prefer keeping you in the house rather than dealing with foreclosure or short sales
Reaching out won't automatically flag your account negatively
Most relief options require working directly with your lender
2
Forbearance can defer payments without immediate credit impact
Payments are typically moved to the end of the loan term
Can last from one month to a year depending on approval
In Tiffany's experience, the deferred amount became a lien rather than requiring immediate repayment
3
Refinancing only makes sense with equity and favorable terms
Requires equity (difference between what you owe and home value)
May lower payments if you've paid down substantial principal
Consider complications like adding a spouse to the deed of trust
4
Short sales and foreclosure should be last resorts after exploring all options
Short sales impact credit but are less severe than foreclosure
Foreclosure has long-term credit consequences
Seek financial counselors or nonprofits for guidance before these options
5
Loan modifications can restructure terms to lower monthly payments
May extend loan length to reduce payment amounts
Requires direct conversation with your mortgage provider
Multiple modification structures may be available

Intro

Tiffany Grant addresses the growing concern of mortgage payment difficulties by outlining relief options available to homeowners facing financial hardship.
Tiffany Grant is a financial coach and host of the Money Talk with Tiff podcast, providing practical money advice and answering listener questions weekly.

Website Ask Tiffany Consultation Facebook Twitter Instagram LinkedIn YouTube

– Why Contact Your Lender First

Tiffany explains that mortgage companies prefer working with homeowners rather than pursuing foreclosure, as it's less work for them to keep you in the house.

They're there to help you and make sure that you can continue to live in the house more affordably.
– Tiffany Grant

– Understanding Equity

Equity is defined as the difference between what you owe on your mortgage and how much your house is currently worth—a key factor in several relief options.

– Refinancing as an Option

If you have equity, refinancing may lower payments. Tiffany shares her 2021 refinance experience and warns about complications like adding a spouse to the deed of trust.

Once I refinanced... it put my spouse at the time, his name on the deed of trust. And so that can complicate things.
– Tiffany Grant

– Forbearance Explained

Forbearance allows deferring payments to the end of the loan. Tiffany shares her personal experience where the deferred amount became a lien rather than requiring immediate payment.

It did not affect my credit score in any way. It didn't report to my credit in any way.
– Tiffany Grant

– Loan Modification

Modifications can extend loan terms to lower payments. Tiffany advises having a direct conversation with your mortgage provider to explore available options.

– Short Sale Process

A short sale occurs when selling for less than owed. The process requires lender approval and involves listing the property, though it impacts credit less severely than foreclosure.

– Foreclosure as Last Resort

Foreclosure has severe, long-term credit consequences. Tiffany emphasizes exploring all other options first and seeking nonprofit support if foreclosure becomes necessary.

– Emotional Support and Professional Guidance

Tiffany stresses the emotional toll of mortgage struggles and recommends seeking support from financial counselors who can provide an outside perspective on your situation.

Sometimes it's best that an outside person looking in, they have a different view of your situation because they're not in it.
– Tiffany Grant

Resources

Topics

mortgage reliefforeclosure preventionloan modificationforbearancerefinancingshort salesfinancial hardshipcredit impacthomeowner resourcesfinancial counseling