Keeping a roof over your head takes on greater urgency when your family income drops because of job loss or other emergencies. If you rank your bills in order of priority, chances are housing is at or near the top of the list.
Housing expenses become a bigger challenge than usual when you're under the stress of reduced or lost income. Housing expenses include:
- Mortgage or rental payments.
- Homeowner's insurance.
- Property taxes.
- Maintenance and repairs.
- Utility bills.
- Furnishings.
- Cleaning supplies.
When family income drops, careful planning can help you avoid the loss of your house.
Handling rental payments
If you rent, tell your landlord about your situation before rent is due. It costs money for a landlord to change tenants. This is why he or she may be willing to work with you on some of the following strategies:
- Ask for a temporary postponement of rental payments until your income goes up again.
- Suggest making smaller payments for a month or two. Then catch up when your income increases again.
- Offer to provide some service, such as painting, in exchange for rent.
Consider taking on a roommate to help cover rent expenses if your apartment has enough space. Also, make sure this would not violate the lease or cause other family problems. Subletting your apartment and finding a less expensive place to live might be another option until your income goes up again.
Your rights as a tenant
According to Minnesota law, a landlord must file and win an "Unlawful Detainer" action in court to evict a tenant. Only a law enforcement officer can carry out a court-ordered warrant to evict a tenant. A landlord may not take the law into his or her own hands and evict a tenant by use of force or unlawful means. If you're a renter, this means a landlord cannot:
- Issue threats of violence.
- Remove your possessions.
- Lock you out of your apartment.
- Cut off essential services such as water or heat.
Likewise, after eviction, a landlord cannot keep a tenant's personal belongings or furniture.
You should consult an attorney to protect your legal rights if your landlord seeks possession of your apartment. Never ignore legal papers. For more information, see the Landlords and tenants: Rights and responsibilities web page.
Note: If you think your lower income will continue for more than a few months, you may have to consider moving to lower-cost rental housing. Try to make that decision sooner rather than later.
Handling mortgage payments
With reduced or lost income, you quickly feel the stress of a sizable mortgage payment on your finances.
If you expect your loss of income to last only a few months, you may be able to cut back on other expenses to meet your mortgage payments.
Important: If you miss a mortgage payment, you have defaulted on your contract and your lender can begin foreclosure on your home. Seek mortgage foreclosure counseling in Minnesota through the Minnesota Homeownership Center.
If meeting your mortgage payment looks impossible, contact your lender before you miss a payment. You may be able to skip a payment or arrange a lower payment. Go in person and take along a new spending plan that fits your reduced income.
Most lenders would rather avoid the time and cost involved in foreclosure if another alternative can be worked out.
If your family's loss of income looks to be long-lasting or permanent, you will need to consider other options. You don't have to live under the extreme stress and strain of meeting mortgage payments that are too high. Some options you have are:
- Taking in a renter and using the money toward mortgage payments.
- Renting your house to someone else and renting less costly housing for yourself. Before doing this, check the effect this will have on your taxes and insurance coverage. You'll also need to meet city housing codes on rental property.
- Selling your house and buying or renting less costly housing.
- Moving in with relatives or friends. Offer to share some of the housing costs.
- Deeding your house back to the lender, instead of going through foreclosure. You may not lose much. For example, if you've been paying on a 30-year mortgage for 10 years, you have not paid for much of the house yet — only about 10 percent. What if you choose this option and the house has decreased in value? You're still responsible for the amount of the loan and must pay the lender the difference.
Also, what if you stay in the house but don't have enough money for food or other necessities? You may find it easier to leave the house and find less expensive housing.
Handling other housing costs
Mortgage and rental payments aren't the only expenses associated with housing. You also need to consider other housing costs, including the following.
Homeowner or renter's insurance protects you in case of loss or damage to property. During times of reduced income, it's especially important to keep your property insured.
If you can't make an insurance premium payment, call or write your agent or the company. There may be some leeway (a 10 to 30-day "grace period") for a late premium payment. Note that failure to pay homeowner's insurance is considered defaulting on a mortgage.
Explain your family's situation to your insurance agent and offer a different payment plan. Inquire about the possibility of smaller premiums by:
- Changing to a monthly, quarterly or semi-annual payment plan with the same coverage. There is a service charge for making a smaller payment based on the amount of the payment. Check the cost differences between annual and more frequent payments, including service changes. Then select the payment plan that will fit your budget and save you the most money.
- Increasing your deductible.
- Improving safety and security alarm systems.
- Checking whether you can drop coverage on buildings on your property other than your house.
- Changing to more basic coverage.
- Checking for possible discounts if you combine your home and auto insurance with the same company.
If you are unable to pay property taxes, contact your county property tax office about delinquent tax procedures. You can be held liable for both unpaid taxes and interest that accumulates on these taxes. Failure to pay property taxes becomes a lien on your property.
You'll receive notice of any actions taken as a result of non-payment of taxes. Don't ignore these notices! If you cannot pay, your property will be sold at auction.
Utility companies will cut off fuel and/or electricity for non-payment unless you take steps to prevent this. Disconnection varies with weather and family health conditions. If you can't make full payments on your utility bills, consider these options:
- Contact the company right away, before your next bill is due. Arrange an in-person meeting.
- At the meeting, propose a new payment plan based on your current ability to pay. Take along information about your income and expenses when you go to your utility company.
- Ask your utility company about fuel assistance programs. These might include coverage under the Cold Weather Rule. Read about this rule on Cold Weather Rule keeps the heat on.
- Talk with family members about ways to reduce utility use without compromising anyone's health or safety.
If you are unable to pay your phone bill on time, contact your provider by phone or email to explain the problem. Late payments usually result in extra charges. Also, you need to make payment arrangements with your provider to avoid getting your service cut off for non payment. This is called a notice of disconnection.
If your phone service is disconnected, you will have to pay the bill plus interest on the unpaid balance before your phone service can be restored. You also may have to pay the cost of reconnection.
Here are some ideas for cutting phone costs:
- Drop landline phones and use only cell phones.
- Switch from smartphones to less costly conventional cell phones.
- Limit the number of cell phones held by family members.
- Limit data use for calls, texts, and other services if you have a smartphone.
- Switch to a lower-cost cell phone plan.
- Consider buying a pre-paid cell phone rather than locking into a longer term phone contract.
Federal and state programs can help with telephone service if you receive public assistance. Check out the federal Lifeline and the Minnesota Telephone Assistance programs to see if you're eligible.
If you get cable TV, drop it or choose only the basic service. If you have internet service through DSL or broadband, check with your provider to see how you can save money. For example, bundling phone and internet service might save you money.
If buying your own internet service is too expensive, consider accessing the internet for free at your local library. You also can gain wireless access for free in some coffee shops and other public places. Be sure to take steps to protect your privacy and keep your data secure on public Wi-Fi networks, though. Read this Popular Science article for tips on staying safe on public Wi-Fi.
over your head takes on greater urgency when your family income drops because of job loss or other emergencies. If yo rank your bills in order of priority, chances are housing is at or near the top of the list.
Housing expenses become a bigger challenge than usual when you're under the stress of reduced or lost income. Housing expenses include:
- Mortgage or rental payments.
- Homeowner's or rental insurance.
- Property taxes (for homeowners).
- Maintenance and repairs.
- Utility bills.
- Furnishings.
- Cleaning supplies.
When family income drops, careful planning can help you avoid eviction from your rental unit or the loss of your house.
Boelter, L. (2006)
Reviewed in 2023