Stop Foreclosure by Catching Up on Your Payments

One way to stop foreclosure is by catching up on your payments. Whether this will work for you or not depends on two things: how far along in the foreclosure process you are, and whether you can come up with the money.

Is It Too Late to Catch Up?

You can easily find out whether your bank is still willing to let you pay your back payments to reinstate the mortgage. All you have to do is give them a call. Now it’s time to determine whether catching up on your mortgage payments is your best course of action to stop foreclosure. The answer to that will depend mainly on what caused you to enter into foreclosure.

Temporary Circumstances

If the circumstances that brought you into a foreclosure situation were temporary, such as being laid off from work or unable to work for a period of time, then getting caught up should get you back on track again. That’s assuming you could afford your payments to begin with, of course.

Lack of Income

If you are simply not making enough money to cover the mortgage payment and the rest of your bills without struggling, catching up may not help you at all. You will need to permanently increase your income in order to be able to afford to keep your house. You may be able to come up with the money to get caught up through other means, but realistically, if you want to keep the house, you have to find a way to make more money.

Catching Up on Your Payments

In theory, there are many ways to get the money to catch up on your payments and stop foreclosure on your home. However, most people find it difficult to come up with a lump sum of money unless it happens to be tax time. You may need to get creative and brainstorm possible solutions, but here are a few ideas to get you started:

  1. Sell your stuff. One way to come up with the money you need to catch up your mortgage payments is to sell things. If you have a high-ticket item like a car or recreational vehicle that can be sold, that could make a pretty good dent in the amount you owe on your mortgage payments. If you have mostly small items, you can try holding a garage sale on the weekend to earn some extra money.
  2. Borrow from your retirement fund. If you have investments such as a 401(k) that you can borrow money against or withdraw from, you’ll need to weigh the pros and cons. There may be a tax penalty to pay depending on the type of account, and you also need to consider the cost. You are basically sacrificing your retirement to save your house. Is it worth it? Only you can decide.
  3. Get a Loan. Another option is borrowing money to catch up on your mortgage payments. This could mean asking family members for loans or getting cash advances against your credit cards. The tough part will be paying it all back and keeping up with your mortgage payments at the same time.

Increasing Your Income

There is no point in catching up on your payments if you won’t be able to continue making them on time. For that reason, unless you fell behind due to a temporary setback, increasing your income is essential to the success of this plan. There are many ways to increase your income. If you are willing to do whatever it takes to keep your home, you should be able to make one of these options work for you:

  1. Ask for a raise. The easiest way to increase your salary is also one of the most nerve-wracking: Ask your boss for a raise. You’re in a dire financial situation, though, so put together a solid case for why you deserve a raise and give it a shot.
  2. Get a better-paying job. If you can do it, this will allow you to make more money without working more hours. The biggest problem with this goal is that it doesn’t depend on you. In order for this plan to succeed, there must be a better-paying job available that you qualify for within a reasonable driving distance. In addition to that, it depends on someone else deciding that you are the best person for the job.
  3. Get a second job. This is something you have a little more control over. If you are willing to take work that doesn’t necessarily pay well, you should be able to get a job in the fast food industry or working in a retail store as a cashier or stocker. These are obviously not dream jobs, but they may provide enough extra income to get your house payments caught up and stop foreclosure until you can find another solution.
  4. Start your own business. This may sound scary, but if you think about what you are already good at, there’s a good chance that you will be able to come up with a service-oriented business that you could offer. It’s best to avoid product-dependent businesses that require inventory because of the start-up costs involved, but a service business such as a cleaning or accounting service can often be run without a huge up-front investment.

A Temporary Solution

If you are able to keep up your payments by getting a second job or starting your own business in your spare time, that’s great. However, both of these are temporary solutions to stop foreclosure. If you keep working these hours indefinitely, you will undoubtedly burn yourself out. For this reason, you need to come up with a plan to transition from this temporary solution to a permanent one.

Your goal should ultimately be to make enough money to pay your mortgage payment and bills each month without struggling and without working a ridiculous number of hours. To accomplish this, you can either find a better-paying job or grow your business to the point where it makes enough money to replace your regular job with enough extra to pay the mortgage too. Another option is to find a way to make your money work for you, but that’s a whole other article. Perhaps I’ll write more about that later.

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