When it comes to housing expenses, there are two main ones that Americans deal with: the cost of rent and the cost of a mortgage. Each housing expense can be difficult to manage, especially for those in a tough financial situation. Luckily, there are a variety of assistance opportunities available. You just need to know where to start!
Struggling with Housing Costs?
If you find yourself having a tough time when it comes to housing costs, then you’re not alone. There are some common housing expenses that people deal with. Most people struggle with their:
- Rent
- Mortgage
What to Do When You Can’t Afford Rental Payments?
You have a lot of options to consider if you can’t afford your rental payments. Some things you can do are the following:
- Try to Get Help from a Government Program
- Get in Touch with Your Local 211
- Consider Relocating or Changing Your Living Situation
- Talk to Family and Friends
Try to Get Help from a Government Program
There are many different government programs designed to help those in need when it comes to renting. You may be able to find opportunities at a local, state, and federal level. When it comes to federal programs, some options to consider include:
- Section 8
- Public Housing
Get in Touch with Your Local 211
The Federal Communications Commission (FCC) delegated 2-1-1 as a resourceful number. They did this all the way back in 2000, so 211 has been providing support to communities for over 20 years! The support they offer includes providing information, and assistance referrals. The 211 network consists of organizations that can help people get the assistance they need in their local area. Some organizations that are a part of the 211 networks include the following:
- Goodwill
- Community Action Partnerships
- United Ways
- Local Crisis Centers
Throughout the country, there are over 200 agencies that have local experts. These experts are trained specialists that focus on the community. They can help people who get in touch with supportive resources that are local. There are plenty of ways that you can get in touch with the 211 networks. You can:
- Call
- Go online
- Text
Consider Relocating or Changing Your Living Situation
If you aren’t stuck in a particular area for any reason, you should consider moving. That’s because the area that you live in can impact how much you pay in rent! For example, in Little Rock, Arkansas, the average cost to live in a one-bedroom apartment is $875 a month (as of October 30, 2022 – this number is subject to change!). However, the average cost to live in a one-bedroom apartment in Manhattan, New York is $4,011 (as of October 31st, 2022 – this number is subject to change!). That’s a pretty big difference! So, if you don’t have to stay where you are currently for any reason, you may benefit from relocating to a more affordable area.
Besides relocating, you could consider changing your living situation. You could downgrade your living situation or even consider getting a roommate. First, let’s take a look at what it would mean to downgrade your living situation. If you live in a one-bedroom apartment at a complex that has a pool and a gym, you are likely going to be paying more than you would at a basic alternative in the same area. Choosing to live in a studio apartment at a complex that has no amenities can make a world of difference in how much you pay.
You could also consider a roommate. Let’s say the cost of a one-bedroom apartment is $1,200 in your area. You may be able to get a two-bedroom apartment for $1,800. Instead of paying $1,200 on your own, you could split the cost of rent with your roommate in a two-bedroom and only end up paying $900 for your half! That can easily reduce how much you are putting towards rent.
Talk to Family and Friends
As a last resort, you can consider asking your family and friends for help. While you want to avoid borrowing more than you can handle, you may be able to get some support from people you trust and care about. Make sure to be upfront and honest about your situation. Be transparent about why you need the amount you’re asking for, what it’s going towards, how you will repay, when you expect to repay, etc. Communication is key!
What to Do When You Can’t Afford Mortgage Payments?
Dealing with mortgage payments is a different kind of stress compared to dealing with rent. If you find yourself struggling to handle your mortgage, there are some tips to consider. You may benefit from the following:
- Refinancing the Home
- Forbearance
- Selling the Property
- Talking to a Housing Counselor
Refinancing the Home
One popular way that homeowners update their mortgage terms is through a mortgage refinance. A refinance refers to taking out a new mortgage that replaces your old mortgage. The new mortgage will have a new set of terms. There are plenty of different types of refinances that can be beneficial in their own unique way. Some different types of refinances include:
- Rate and Term Refinance
- Cash-Out Refinance
- Streamline Refinance
- Interest Rate Reduction Refinance Loan (IRRRL) Refinance
- Cash-In Refinance
- Reverse Mortgage
Forbearance
Sometimes people may just need time to rebuild their finances. Those that struggle with their mortgage can benefit from a forbearance. During a mortgage forbearance, the lender pauses payments. That means the borrower will not need to pay the money back during the specified paused timeframe! The timeframe will vary depending on a variety of factors including the lender, specific situation, etc. Oftentimes, when people choose forbearance, they won’t have to deal with additional costs like fees, penalties, etc.
Selling the Property
Homeowners can find themselves underwater on their mortgages. That means that they owe more money on the home than what it is actually worth. In these cases, it may make sense to sell the home. If you are unsure whether or not this is the right decision for your financial situation, you can get in touch with a professional like a housing counselor to help you better understand your options.
Talking to a Housing Counselor
We briefly talked about this in the last point but we are going to expand on it! Housing counselors are an extremely useful resource. There are different things that housing counselors can help with. This includes:
- Pre-Purchase Counseling
- FHA Loan Counseling
- VA Counseling
- USDA Counseling
- Reverse Mortgage Counseling
- Foreclosure Counseling
Bottom Line
Whether you are dealing with the cost of homeownership or the cost of a rental, it can be difficult to manage. You have a wide variety of options to consider. If you are having a hard time with rent, you may benefit from the following:
- Trying to Get Help from a Government Program
- Getting in Touch with Your Local 211
- Considering Relocating or Changing Your Living Situation
- Talking to Family and Friends
On the other hand, if you are struggling with your mortgage, you may benefit from the following:
- Refinancing the Home
- Forbearance
- Selling the Property
- Talking to a Housing Counselor
You have more resources than you may realize. You just need to know where to start. Take your time, you may be in for a pleasant surprise to find a plan of action for your current situation.
