As my legal career has gotten longer, I have learned that while getting older does not necessarily make a person wiser, but it does make them more experienced.
A decade ago, I tried to help hundreds of homeowners who could afford to make their monthly mortgage payment but thought that if they missed just a few payments, their lender would have to lower their mortgage payments.
By the time they realized that their lenders were not on board with the plan, the money from skipped payments had been spent elsewhere, and they found themselves in a lawyer’s office having been served with a foreclosure lawsuit. We saved some of their homes, but many had gone too far down the rabbit hole to help with more than a softer landing.
Now I am getting daily calls from homeowners asking about their lender’s offer to allow them to skip a few payments due to the coronavirus pandemic. When I ask if they can afford to pay their mortgage, most tell me they can but would rather hold the money in their bank account, “just in case.”
I can understand their rationale. Little is more unsettling than uncertainty, and it just feels “right” to keep money in the bank right now. Unfortunately, fear can often lead to bad decisions with long-term consequences.
Now more than ever, it is important to keep three to six months of expenses in the bank, and if you genuinely cannot afford to pay your mortgage without endangering your family, then you should ask your lender for the assistance offered.
But if you have the savings put aside to weather the storm or have a stable job in an essential industry, you should pay your mortgage.
There is no reason to risk a problem when it is not necessary, and it is always a good idea not to ask for help before you need it.
Gary M. Singer is a Florida attorney and board-certified as an expert in real estate law by the Florida Bar. He writes about real estate for the South Florida Sun Sentinel
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