From Ash Cash, personal finance expert, speaker and bestselling author.*
I want to share my biggest financial mistake to date in hopes to further inspire people.
Whenever I want to accomplish something, I start with a plan and follow it no matter what. Some people called it stubbornness, but I like to call it persistence. Having a plan can be great, until it’s not.
At one point in my life, I decided to leave a great-paying job to become a full-time entrepreneur. I was on a quest to follow my dreams. I knew the pitfalls and risks that came with my decision, but I felt like I was immune because, well it was my calling. Within a few months of taking the leap, I fell behind on my mortgage and almost lost my home.
Letters from the bank — and ultimately, their lawyers — came pouring in. In no time, my family was facing foreclosure. This was the first time anything of this magnitude had ever happened to me. I didn’t know where to start or what to do.
My family and I braced ourselves for what seemed like the inevitable: we packed our bags with nowhere to go. Just when I thought all hope was lost, I learned about less extreme ways of handling and resolving missed mortgage payments.
One option was a short sale. I could sell my home for less than I owed on the mortgage, if my lender would approve the transaction. The outstanding balance would then be forgiven. Another option was a deed in lieu of foreclosure. This would allow me to voluntarily give up my rights to the property instead of going through the stressful and costly legal foreclosure process.
Ultimately, I didn’t have to do either because I found one more option. At the time there was a federal government program called the Making Home Affordable Program which helped homeowners avoid foreclosure. I was able to do a loan modification where my lender changed the terms of my loan to allow me to make lower payments so my family could stay put. It made staying in our home a reality.
The loan modification began with a three-month trial period. After I successfully made the first three payments on time, the modification became permanent. While that was great news, the delinquent payments remained a blemish on my credit report. However, time does heal all. As I continue to make on-time payments toward my mortgage, the delinquencies will eventually fall off. Lesson learned. The next time I follow a dream, I’ll do it a lot more carefully.
*The opinions/views expressed by Ash Cash are not considered opinions/views of BMTX, Inc., a wholly owned subsidiary of BM Technologies, Inc. BMTX is not a financial advisor and individuals are urged to obtain and consult their own financial advisors.