Facing Foreclosure? Take These Steps

4. Increasing Income

Getting a second job is not always the best option. Depending on your situation, you may be able to earn extra money by renting a room or a portion of your house. You are better off doing this and spending time taking classes and increasing your skills to someday qualify for a higher-paying job, rather than working two jobs.

5. Cutting Expenses

Most people have quite a few expenses that they can cut. If, however, you are forced to cut all expenses to the bone just to make the mortgage payment possible, this is another sign that you bought more house than you can afford. If you can't spend a cent on anything else but your mortgage, serious thought should go to selling the house and getting one that is affordable at your income level.

6. Consider Selling

If you are not able to form a plan that will enable you to reliably pay your mortgage each month, then you should consider selling. Even if you must take a loss on the house, this is a better option than trying to hang on to a house that will eventually drain all your money.

Since selling a house takes time, this is yet another reason why it's essential to take action at the first signs of trouble. If you decide to sell, let your lender know that you are selling because you won't be able to make your mortgage payments. If the lender knows what you are trying to do, it may be willing to stop any foreclosure action for a specific time period while you attempt to sell the house.

When it comes to your mortgage and the possibility of not being able to pay it, the worst move you can make is to do nothing. Coming to terms with the difficult choices that need to be made may not be enjoyable, but the sooner you do, the better off you will be in the long run.

Should you refinance? Crunch the numbers with the help of this mortgage calculator on TheStreet.com.