What to do with mortgage payments when you suddenly become medically unfit?
What to do with mortgage payments when you suddenly become medically unfit?
Your home is your haven, a place where you can relax and unwind and be at peace. Despite this solace, there are times when you have to keep your home as collateral when you seek benefits of availing a mortgage. There are circumstances where you may have to do this.
When you take a mortgage, you have to pay an amount every month, which is usually fixed depending on whether you are opting for a fixed rate of interest or a variable one. Regardless of the scenario, you must repay a portion of it every month. Let us find out more about the same under the following sub-topics, namely;
- Your health and mortgage
- What measures will you take to avoid falling behind on payments
So, check out these points in the paragraphs that follow-
Your health and mortgage repayment
While you are still paying your mortgage payments every month or while you are in the mode of repayment, it is quite likely that you might fall sick due to reasons that you never did expect. Nevertheless, you cannot stop these payments right away and continue making payments as usual.
Since you become medically unfit, it is quite likely that you will feel a financial crunch at some point of time or the other. This is especially true if you have to shell out money for a hospital stay that siphons out a considerable amount of cash. If you have already built an emergency fund, it should not be a problem meeting the excess expenses, but not everyone might be as sensible as you are. So, what will you do under such circumstances? Let us find out more about the same.
What measures will you take to avoid falling behind on payments
You can adopt the following measures to stay secure in your monthly mortgage payments and avoid defaulting on the same-
Shed your expenses
Every month you have a fixed expense to meet for which you keep aside some cash. Regardless of whether it is a utility bill, energy bills, or miscellaneous expenses, try to shed these expenses as much as possible. You will possibly not be able to reduce your energy consumption, but at least you can put in some extra effort to minimize consumption so that the bill is less too.
If you are used to eating out or buying expensive gifts and throwing lavish parties, abstain from doing the same. You have to minimize the frills and fancies from your life. Make a budget and note down the expenses that you cannot do without. And then follow these expenses religiously.
Assess non-cash assets and try to derive better values from them
Non-cash assets include frequent flyer miles and gift cards that you can redeem and make use of. This will reduce your expenses to a considerable extent by saving the cash you would have to shell out. Many credit cards offer reward points. You can convert these points as gift points and buy cards if you have to gift someone.
The non-cash assets are of great help, and you get to understand the same when you can redeem the points. Once you have done your mortgage calculation with this mortgage calculator, you will be able to plan your finances better.
- Reduce your credit card debt
If you have been using a credit card, piling up debts on these plastic cards are not new to you. Credit cards usually attract higher rates of interest. So, it would help if you reduced this unnecessary expense and instead use the money you are using to pay off credit card debts towards your mortgage payments. Try to do way with credit card debts as much as possible.
Try to generate passive income
Many times, you will come across people and households that bank heavily upon various avenues of passive income, trading is one of the main. The proceeds of the income from trading helps immensely to meet financial obligations. There are multiple avenues of generating passive income forex trading being the same. You can either opt for long-term or short-term trading with the help of a reliable trading broker.
Insurance coverage
Having insurance-coverage that is adequate and will take care of your expenses when you are ill goes a long way. Compare rates of insurance, and if you find that you are getting the same coverage from another insurance carrier at a price that is a little lower, you can minimize your expense and pay for your mortgage payment instead.
This applies to your insurance coverage that is already existing or if you have just bought a new policy lately.
Talk to your mortgage service provider
If, after taking all these measures, you find that you are not able to manage your monthly mortgage payments, you can try to refinance the debt. Alternatively, you can also talk to your mortgage service provider and negotiate with them to reduce the monthly payment. For this, you can request to increase the term of the mortgage, or you can switch over to a variable interest rate that will help you to reduced your monthly payments depending on the prevailing market conditions.
However, if you are switching from a fixed rate of interest on your mortgage to variable you must talk to a mortgage expert and assess how this will benefit in your case.
Remember, the circumstances and terms of agreement with the mortgage lender is not the same for every individual. So, before taking this step, it is a wise move to seek financial advice from an expert that can guide you about how you must go about, especially when you do not have good health.
However, it is best to be prepared for a rainy day. If you have been financially responsible throughout, which eventually gets reflected in your credit report, you will have many avenues that will be able to keep you afloat during the financial crisis.
