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How to Deal With Job Loss as a Homeowner

Written by Posted On Tuesday, 19 September 2017 18:57
Job loss as a homeowner can be stressful. Job loss as a homeowner can be stressful. Photo Credit: Pixabay

Job loss is a very real possibility for most people in the workforce, and even those who feel as though they have exceptional job security can be surprised from time to time with an unexpected layoff related to downsizing or reorganization. As a homeowner, you may rely on your regular income to make your mortgage payment and to pay for other housing-related expenses, such as taxes, insurance and maintenance. Therefore, the issue of a job loss can be financially devastating for a homeowner to deal with. You may be wondering how you can afford to keep your home after your job loss. If you have recently lost your job and are feeling stressed by your current position, consider walking through these steps to more easily navigate through the situation.

Analyze Your Finances

One of the first steps that any homeowner dealing with a job loss should take is to analyze the current state of your finances. To begin, review your current assets, including your savings account, retirement account and non-retirement investment accounts. Make a list of any non-cash assets that you may be able to sell as well, such as a boat or an extra car. Determine how much money you owe on your home mortgage and what the value may be to estimate your equity. Then, analyze your monthly budget. You may be able to generate some monthly income through your spouse’s job, unemployment compensation or even dividends or other investments that you own. However, even when you account for these sources of income, you likely will face a cash deficit each month until you find a new job. Determine how long your assets will last and at what point you may need to sell a boat or other non-cash investments. This exercise can be stressful, but it can also help a homeowner who is dealing with a job loss to make more intelligent financial decisions in the weeks and months to come. In some cases, it may even reassure you and give you peace of mind.

Eliminate Unnecessary Spending

Many people live a more comfortable lifestyle than they truly need for basic survival. It is wise to reduce unnecessary spending after a job loss so that you can conserve your assets as much as possible. Therefore, consider shopping around for more affordable insurance rates, reducing your cell phone plan and even eliminating cable TV service altogether to save as much money as possible. Avoid dinners at restaurants or extravagant purchases, and delay making these frivolous purchases until you are employed once again. A homeowner who has experienced a recent job loss setback may be able to reduce spending by hundreds of dollars or more per month, and this can be truly beneficial if you want to minimize the financial impact of the job loss on your future.

Begin the Job Search Immediately

Because you are a homeowner with a mortgage and other related expenses, you should take every step possible to find a new job as soon as possible after losing your job. Some people are inclined to take a few days or weeks off and to enjoy their leisure time, but this wasted time can result in financial issues down the road. It is best to update your resume and to begin looking for positions to apply for as soon as you get your finances in order. You may enjoy the best results when you network, use social media and use headhunting services effectively. Consider making job hunting your full-time job until you find a position, and plan to devote many long hours to the effort each day until you are offered a new job and start generating income once again.

Weigh the Pros and Cons of Selling Your Home

A common concern that a homeowner may have after experiencing a job loss relates to the ability to pay the mortgage. Your current home may be much larger and more extravagant than you actually need, and your mortgage payment and other housing expenses may account for a very large portion of your monthly expenses. If this is the case, it may be beneficial to examine the pros and cons associated with selling the home and downsizing. Remember that it may take several months or longer to sell a home. The last thing you want is to wait until your financial assets have dried up before listing the home for sale. If you only have a few months’ worth of assets to draw from currently, you may consider consulting with a real estate agent to begin the listing process.

Talk to Your Mortgage Company

If you are concerned about your ability to make your mortgage payments on time in the near future after experiencing job loss, it is important to speak with your mortgage company and a lender about your options. A homeowner in financial distress may qualify for some refinancing programs that could result in lower monthly payments or debt forgiveness forgiveness, but you typically must not have a history of late mortgage payments to qualify. Some mortgage companies may allow a homeowner to skip a payment or two as well, and this can help you to conserve your funds as much as possible until you find a new job.

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Dan Barcelon

My name is Dan Barcelon and I believe that Real Estate can be one of the most valuable assets you'll ever own. I'm dedicated to educating and guiding my clients so that they can make better real estate decisions and have a better home life. I love to share my knowledge and experience with homeowners and real estate professionals through my blog.

You can find my blog at EPIrealestate.biz to learn more, and if you'd like to discuss if buying, selling, or investing in real estate in Long Beach, California is right for you at this time, feel free to reach out. You can call/text me at 562-270-5812, or you can e-mail me at danb@EPIrealestate.biz.


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