Signs You May Not be Able to Afford Your Mortgage Payments

Real Estate Transaction Lawyer

When you are in the process of purchasing a home, lenders and realtors may not always work as diligently as they can to ensure that you do not find yourself in over your head. As a result, prospective home buyers make financial tradeoffs in order to afford the home of their dreams. Sometimes, the financial planning you promised to be dedicated to, doesn’t always pan out. Others, may have committed to a mortgage they once were able to afford but later down the road have a change in their financial circumstances. Here are some signs you may not be able to afford your mortgage payments:

Sign #1 Your Bills Are Often Past Due

Taking a look at your financial situation and your budget is key should you find that you are unable to pay your mortgage and other financial obligations on time. This can be a clear sign that you are in over your head. Making late payments can have a serious impact on your credit score.

Sign #2 You Never Pay More Than the Minimum

When it comes to your mortgage, it’s normal to pay the amount you agreed upon. However, when you carry other debts such as credit card balances, only making the minimum payment may be an indication that there is a problem. Only making the minimum payment can not only result in paying exorbitant interest rates, it also means that you may be carrying far too much debt.

Sign #3 You Can’t Afford the Upkeep of Your Home

Although your mortgage covers what you owe your lender for your home, it will not cover the repairs and maintenance that often comes with owning a home. The unexpected can be just around the corner. Meaning, you may require a new furnace, a pipe may burst or some other essential responsibility that comes with owning a home. This can make it difficult to maintain the value of your home and also result in financial setbacks.

Avoiding Foreclosures

Many who are in danger of having their home foreclosed upon have certainly considered whether they will be able to avoid a foreclosure. Most homeowners want nothing more than to stay in their homes. Being unable to pay your bills can feel helpless and shameful. Losing your home can feel like a sign of failure. Avoiding a foreclosure may be possible with the assistance of an attorney. Here are some ways that a foreclosure may be avoided:

  • Seek help from legal counsel. They may be able to help advise you in the proper course of action and, in protecting your rights.
  • Attempt to negotiate a compromise with your lender.
  • File for bankruptcy. This should be carefully considered prior to officially moving forward with a bankruptcy. Filing for bankruptcy may be a way of stopping a foreclosure. If you file a foreclosure, creditors must stop making attempts at collecting debts for a time.

A homeowner faced with foreclosure may have available options. Speaking with an attorney may not only help in presenting you with all that you may qualify for, but in helping you make the most informed decision possible.

Finding that you are in over your head can be troublesome. Not only may it keep someone up at night, there may appear to be no solutions to the possibility of losing your home. A real estate transaction lawyer Newport Beach, CA trusts may play a key role in advising you regarding the proper course of action.

Thank you to our friends and contributors at Terry Mudge, LLP for their insight into real estate law and mortgage payments.