Even though the Irvine job market is experiencing record low levels of unemployment in 2018, you should never assume your job will last forever, particularly when you have mortgage payments to worry about. If you unexpectedly lose your job, your first thought will likely be to find another one as soon as possible. While this a reasonable course of action, your priorities should be keeping all members of your household fed and healthy and avoiding mortgage default.
Here are some recommendations to follow in case you find yourself without a paycheck and with mortgage payments on the horizon.
Tap into Your Reserves
Depending on the type of mortgage loan underwriting you were subject to when you purchased your home for sale in Irvine, you may have been required to submit proof of three months’ worth of cash reserves, which consists of principal plus interest, private mortgage insurance, and a prorated property tax and homeowners insurance premium payment. Many new homeowners tap into this cash soon after they move into their new properties. If this is the case, remember to build up this important reserve once things get back to normal, and you may want to include three months’ worth of groceries and utilities.
Check Your Insurance Coverage
Go through each of your insurance policies to see if any of them offer mortgage payment protection. In the wake of the subprime mortgage meltdown of 2008, some providers of private mortgage insurance included coverage clauses that protected borrowers against financial emergencies within the first two years after closing. These provisions are usually good for a few monthly payments.
Get in Touch with Your Lender
Ever since the Consumer Financial Protection Bureau (CFPB) was enacted in 2011, the rules on mortgage lending and servicing have changed significantly. In the past, borrowers could pretty much count on going into default and even foreclosure after a couple of missed payments, but lenders these days will work with you to find a solution to your financial impasse. The key is to contact your mortgage bank or servicing entity the moment you realize you cannot make the next payment.
File for Unemployment Benefits
In California, the Employment Development Department handles unemployment benefits payments as long as the job loss was involuntary. If you were terminated, laid off, or your employer ran out of money to make payroll, you may be eligible to receive unemployment benefits, which will further make you eligible for the next recommendation.
Consider the Home Affordable Unemployment Program
If you are receiving California unemployment benefits from the EDD, check with your mortgage lender or servicing entity about HAUP. This flexible program was one of the CFPB’s key initiatives a few years ago, and it can help you with a suspension or reduction of mortgage payments for up to 12 months.
Make sure you have a steady job if you’re thinking about purchasing Irvine, CA, real estate. Your next step is to connect with a reliable agent from Irvine Residential Living who can help you find an amazing property in the area. Call 714-454-6304 to schedule an appointment.