Home Foreclosure Losing your home in retirement doesn’t have to happen

Losing your home in retirement doesn’t have to happen


Retirement is a time when you should relax and enjoy the easy life. But for too many people aged 62 and over, they simply haven’t saved enough for retirement to meet their home mortgage payments. Now they have no choice but to dip into the capital in their savings account, which could lead to dangerous consequences if they spent all their money too quickly.

One way to avoid this horrible pitfall is to apply for a reverse mortgage. Designed for people 62 and older who have lived in their homes for years and years, a reverse mortgage allows you to tap into all the equity you’ve built up over decades.

According to All reverse mortgages, a reverse mortgage lender, by being approved for a loan, you will never have to pay another mortgage payment again. Plus, you won’t have to repay the loan until you leave the house or the borrower dies.

But what about seniors who don’t have the equity to qualify for a reverse mortgage?

According to a recent report, some companies that manage 401K for their employees will allow an emergency withdrawal of funds to prevent you from losing your home. But if you’re already retired and managing your plan on your own, it’s a decision you’ll have to make on your own. A hardship withdrawal might be necessary to avoid foreclosure.

Enter HUD

In a new report from ATH (Housing and Urban Planning), experts will tell you that losing your home does not happen all of a sudden. It happens gradually at first, then suddenly. Perhaps due to a change in your financial situation like the loss of a job, a bad divorce, unexpected medical bills, or even an increase in federal and state taxes, you’re worried about missing a house payment.

Or maybe your credit card debt has gotten out of hand. For example, if you are having trouble paying all of your monthly bills and have to resort to buying groceries from the supermarket with a credit card, you are most likely experiencing financial hardship that could lead to a missed mortgage payment.

Is time on your side?

Experts say that even when faced with financial difficulties, relatively few people think they will lose their homes. Deep in their minds, they feel that time is on their side.

But here’s how time is not on your side: If you’re missing a payment for the first time, chances are your lender will contact you by phone or letter or both. They will suggest that you speak to a housing counselor if you are having trouble finding money.

If you miss a second payment, your lender will be more aggressive with their calls as to why you haven’t made the necessary disbursements. Here is what you need to do to avoid losing your home, especially if you are retired. You should take calls from your lender rather than avoid them.

Speak honestly with your bank lender and explain your financial situation in detail. Offer information about the steps you are taking to resolve the difficulty. In other words, by making a good faith effort with your lender, you could avoid foreclosure, at least in the short term.

It is even possible to make a payment to avoid being three months late. Again, you need to speak with a housing counselor who can provide you with the financial advice you need.

A third missed payment

If you miss a third payment, your situation with your lender will start to get risky. You will likely receive a stern letter stating that you are “past due” and have 30 days to bring your mortgage up to date.

This is called a “letter of request” or “notice of acceleration”. If you do not pay the amount you owe and / or if you do not make some sort of arrangement to pay by the date stated, foreclosure proceedings will begin.

Keep in mind that the lender is unlikely to accept anything less than the full amount owed on the mortgage. Again, if you can’t find the amount and you want to avoid losing your home, you need to work things out with your lender.

A housing counselor can help you deal with this situation and save you and your spouse the hassle and even the humiliation of being evicted from your own home during your retirement years.

NOTE: If you’re having trouble paying your mortgage, call toll-free (800) 569-4287 to find a housing advisor near you.

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