A tough choice: Your health or your mortgage
The news media is filled with depressing stories about the U.S. housing market’s long, painful slump. But this story from the Wall Street Journal is a particularly alarming one: Seems that a number of U.S. homeowners are faced with the difficult choice of either paying their medical bills or making their mortgage payments.
How would you like to face that decision?
The reasons so many U.S. residents are facing this impossible choice are fairly obvious to anyone who’s been following the country’s economic and housing troubles.
According to the Journal story, homeowners in the past have often relied on borrowing against their homes to pay their doctor bills when they suffer a serious accident or prolonged illness. Problem is, home values today are plummeting. At the same time, many homeowners took out adjustable-rate mortgages that either have or are on the verge of resetting, meaning that their mortgage payments will be even higher. This leaves fewer dollars for medical expenses. Some homeowners are passing on medical treatments and paying their mortgages instead.
To make matters worse, unemployment numbers are rising quickly. The Journal story mentions that more than 1.2 million jobs have been eliminated this year as of late November. When people lose their jobs, or are laid off, they often lose their health insurance coverage. It’s extremely costly for homeowners to purchase their own health insurance.
This all means that a growing number of homeowners have to make a gut-wrenching choice: their health or their home.
Many homeowners have already fallen behind on their mortgage loans. The Mortgage Bankers Association reports that more than 9 percent of mortgages on single-family homes were a month or more overdue or had fallen into foreclosure in the second quarter of this year. That’s the highest that figure has stood since the bankers association starting measuring it 39 years ago.
Fortunately, there are places where homeowners can turn for help. One of the best is with their own mortgage lender. As soon as homeowners begin to struggle to make their mortgage payments, they should call their lender. It may be a hard call to make, but lenders are often able to work out a compromise that involves anything from temporarily suspending payments to refinancing a loan so that the monthly payments are lower.
The Journal story also contains resources that homeowners can turn to for housing assistance, including the Homeownership Preservation Foundation, NeighborWorks America and the counseling services offered by the U.S. Department of Housing and Urban Development.
If you find yourself facing the difficult choice of making your mortgage payments or paying your other bills, make sure to seek help. The longer you wait, the more difficult your financial problems will become.
