Coping With a Layoff

Layoffs are all too common these days. The loss of regular and planned-for income can make it difficult to pay the mortgage. If you are laid off, here are few ideas to help you stabilize and be better equipped to make the mortgage payment.

• If you anticipate that your layoff may affect your ability to pay your mortgage, call your lender quickly. Try to work out a modified payment plan that will enable you to continue paying your mortgage.

• Seek assistance from private- and public-sector plans to help you keep your home.

• Unemployment compensation rarely is enough to cover home loan payments. You might consider selling your house and relocating to find work elsewhere. Because of the overall downturn in housing prices, do careful research to see if you can sell for a profit, or at least break even. It may also take a long time to sell your house.

• If you are thinking about relocating, look into whether renting your house would make sense given your local economic situation and housing market. Can you rent it for more than your mortgage payment? If not, will you be able to cover the difference?

• If renting is a possibility, first check with your lender and your insurance carrier to see how renting will affect your mortgage and insurance coverage. You may need a rental property policy.

• Use your imagination to find money that can supplement your unemployment benefits and make enough to keep paying the mortgage. One way is to sell possessions for cash. Try Craigslist and eBay to sell household items.

• Renting out rooms or part of your house can give you regular infusions of cash to apply to your mortgage payment.

• Part-time work can take up some of the slack caused by your layoff and help you make enough to pay the mortgage. Check with your state’s unemployment office to see how working part time might affect your benefits.

Read more about handling a job-related crisis.