In a 2021 report by the Consumer Financial Protection Bureau, it was observed that over 11 million American families were at risk of losing their houses. The main reason behind this was that all these families were behind on their mortgage payments. This isn’t an uncommon scene in the U.S., where people often fail to pay off their mortgage payments because they’re running low on finances.
When it comes to paying off a mortgage, it can be a challenging task, especially if you’re running low on finances. However, there are several things you can do to make the process a bit easier.
Here are six things you can do to pay off your mortgage when you’re running low on finances.
#1 Refinance Your Mortgage
Refinancing your mortgage is one of the easiest ways to lower your monthly payments. By refinancing, you can take advantage of lower interest rates and extend the length of your loan, which will lower your monthly payments. However, keep in mind that refinancing can also come with additional costs, such as closing costs, so make sure to weigh the pros and cons before making a decision.
Make sure the new loan term has a lower interest rate than the existing loan. Otherwise, given your financial situation, refinancing won’t be a wise option.
#2 Make Extra Payments
Making extra payments on your mortgage can be an effective way to pay off your loan sooner, even when you’re running low on finances. By making extra payments, you can reduce the overall interest you’ll pay on a loan, which can save you thousands of dollars in the long run.
One way to make extra payments is to increase your monthly payments by a small amount. For example, if you’re currently making a $1,000 monthly payment, try increasing it to $1,050 or $1,100. This small increase can add up over time and help you pay off your mortgage faster.
#3 Rent Out a Room
Renting out a room in your home can be a great way to help pay off your mortgage when you’re running low on finances. By renting out a room, you can earn extra income each month, which can help you pay off your mortgage faster.
Moreover, renting out a room can also help with other expenses like utility bills and home maintenance. Make sure to check with your lender and local laws regarding renting out a room in your mortgage-owned property.
According to the World Population Review, an American house renter pays around $1,326 a month. That’s around a thousand dollars in your pocket every month, something that will surely help you pay off your mortgage in due time.
#4 Sell Unnecessary Items
Take a look around your home and see if there are any items you can sell to help pay off your mortgage. Whether it’s furniture, electronics, or other items, selling them can help you generate extra cash that you can put toward your mortgage.
Ebay would be a great place to sell your items. According to the company, eBay has over 135 million active users worldwide. That means there’s a good chance that someone out there will take these items you want to sell off of your hands, and you can benefit financially from that.
#5 Get a Second Job
Getting a second job can be an effective way to help pay off your mortgage when you’re running low on finances. By earning extra income, you can put more money towards your mortgage payments each month, which can help you pay off your loan sooner.
It’s important to keep in mind that getting a second job can require a significant time commitment, so make sure you’re able to balance it with your existing responsibilities.
#6 Cut Back on Expenses
Lastly, consider cutting back on expenses in order to free up more money to put toward your mortgage. This can include things like cutting back on dining out, canceling subscriptions, or cutting back on unnecessary purchases.
In conclusion, paying off a mortgage can be a challenging task, especially when you’re running low on finances. However, by taking advantage of options like refinancing, making extra payments, renting out a room, selling unnecessary items, getting a second job, and cutting back on expenses, you can make the process a bit easier.
It’s important to take a look at your own financial situation and see which of these options would be the best for you. Remember, if you’re struggling to make your mortgage payments, it’s important to reach out to your lender as soon as possible to see if there are any assistance programs available to help you.