The biggest concern for many people after a job loss is wondering how they’re going to afford their mortgage payments. It’s typically the most expensive bill families have, and the one they often worry about most. But there are a number of options to help pay your mortgage in the event of sudden unemployment.
Unemployment mortgage insurance
For those worried about losing their job, unemployment mortgage insurance can provide a crucial safety net. Similar to how car insurance pays for damages in the event of an accident, job-loss mortgage insurance covers part or all of your mortgage payment should you become unemployed. Unemployment mortgage insurance policies can be purchased through traditional insurance companies, new home builders, or even local housing agencies. Just like with any insurance product, policies vary by company and state, so read the fineprint closely before signing on the dotted line.
State assistance programs
Most states offer some form of mortgage assistance program for qualified candidates. Many only provide short-term assistance, but that can still be a valuable resource as you continue your job search. State assistance generally depends on your total household income, the number of people in your family, and your mortgage rate. Some states offer assistance specifically for people facing unemployment, and accessing those programs can get you the money you need to weather your job transition.
Creating a budget that works
If you don’t qualify for state assistance with your mortgage, you may be eligible for other benefits that will reduce your other monthly expenses, making it easier to meet your mortgage payment. For example, collecting unemployment benefits or using food assistance may free up enough room in your budget to make mortgage payments manageable. It may take some creativity, but by reducing spending and finding assistance for other areas of your life, you can prioritize your house payments and remain on sound financial footing.
Below you will find additional information and resources on mortgage assistance:
Federal guide to avoiding foreclosure
Freddie Mac mortgage assistance programs
Overview of job-loss mortgage insurance