Economic stresses can happen to the most careful individuals. You may think
you are prepared by planning, budgeting and saving, but unexpected issues can
arise for various reasons. Identifying areas where you are the most vulnerable
and making contingency plans is one aspect of the solution, but sometimes
these efforts are inadequate. You need to know what to do if there is a loss of
employment, health issues or a divorce. Here are some solutions for getting
through tough financial times.
Even before you try to find solutions, you must have the knowledge about what
your economic picture is under normal times and whether or not you are over-
extended in the event of a fiscal emergency. Good record-keeping is always a
smart approach to financial issues. If you can avoid the tough times, it is better
than finding a solution after the fact. However, here are some pointers for when
you have financial problems on the horizon.
Ask for help as early in the process as possible. Don’t let yourself be stopped
by embarrassment or nervousness about approaching your mortgage company
or insurer. Delay can affect your credit rating and can cause negative balances
to grow quickly. Mortgage lenders understand that helping the borrower to get
through the stressful situation is preferable to having a defaulted property on
When you reach out to the lender, be sure you have the entire picture of your
financial situation. You should be prepared to explain what event(s) have created
the crisis. Have a detailed budget that shows your income and expenses,
assets and a current credit report. If you have alternative income sources, they
can be important. You should also explore any insurance coverage that might be
available on credit cards or mortgages.
Bring any documentation that applies to your situation. You might have a letter of
dismissal, insurance policies, fees on the property or documentation about your
home ownership. Save time by having these available for the lender or insurer.
Be brave about asking questions. You may not know all the options available to
you, but you can ask questions of the lender or insurer. You can ask for solutions
such as deferring payments, capitalization of past due amounts or increasing
the mortgage amortization term. There are many ideas which may apply in your
particular situation. Finding the best solutions for getting through tough financial
times will require some determination on your part.