How To Avoid Foreclosure

How To Avoid Foreclosure

2019/02/25

There are plenty of things you can do to avoid foreclosure. The US laws have provided you certain legal rights in this regard, which you must be well aware of. If you are having difficulty in keeping up with your mortgage payments.

This is the time you should either seek help from legitimate foreclosure prevention experts or should take a few steps on your own, such as refinancing. Following is a brief rundown on some of the proven ways to make sure you do not lose your home in foreclosure.

Take Proper Actions At An Early Stage

You should never ignore the problem because ignoring the problem will never bring you a solution; instead it will only add to your troubles. The longer you wait, the more difficult it will be to reinstate your loan. Therefore, you are advised to take immediate action as soon as you miss a couple of monthly payments toward your mortgage.

For example, you should contact your lender and discuss your problems with them; your lender is very much likely to suggest you some solutions, such as interest only payments for a few months until your finances get back on track. Always remember, it is not just you; even your lenders want to avoid foreclosure. They are not at all interested in your house; they just want their money back.

Respond To The Notices Sent By Your Mortgage Lender

When people fall behind their mortgage payments, they often start ignoring their lenders, which is a big mistake because it does not only close the doors for some possible solutions but it also maximizes the chances of foreclosure. Therefore, you are strongly recommended to respond to the letters and emails sent by the mortgage lender.

They are not going to send you to jail just because you are unable to keep up with the monthly payments; instead, when you respond to their notices and make them aware of the financial hardship you are going through, they are very much likely to let you know about the foreclosure prevention options. Besides that, it is also important to note that lenders lose their faith in those borrowers who never respond to their notices. On the other hand, those who do respond promptly are rated as serious borrowers who are willing to make the repayment.

Get Yourself Educated About Your Rights Regarding Mortgage And Foreclosure

The foreclosure laws vary from one state to another. Therefore, you are advised to contact your state government housing office and get informed about your rights and the types of legal options you have. You must also go through your loan documents thoroughly in order to find out information about the possible actions that your lender can take when you fall behind your monthly mortgage payments. The timeframe for foreclosures also varies depending upon an array of factors. So, make sure you are well equipped with all the information, as it will help you prepare your strategies to avoid foreclosure.

Get Counseling From A HUD-Approved Housing Counselor

People often get overstressed in a situation like this, where their house is at risk. Most of them get tempted to hire a financial counselor who makes lucrative promises, but at a hefty fee. It is very important for you to keep in mind that you can easily get free or very low-cost foreclosure counseling in the United States of America by contacting the Department of Housing and Urban Development (HUD).

You can simply give a call at TTY (800) 877-8339 or (800) 569-4287 and find out information about how to get assistance from a HUD-approved housing counselor in your area. The counselor will review your debts and finances thoroughly and will educate you about your options. They will help you understand the laws. And, if necessary, they will even act as your representative and negotiate an affordable repayment deal with your lender to avoid foreclosure.

Cut Down Your Expenses And Save More Money

No matter which solution is going to work in your case, you will still be held liable to make the payments; for this, you need a lot of extra money. Therefore, in order to maximize your chances to succeed with a possible foreclosure prevention solution, you must start working on your household budget in a way that should increase your savings. To start with, you can prioritize your expenses and cut the fat out of it.

For example, you probably can live without those dozens of monthly magazines and other such subscriptions, where you are spending around $50 every month. If you look around thoroughly, you can easily find many expenses that you can eliminate without any trouble. However, besides reducing your expenses, you are also recommended to consider increasing your income, such as by working overtime or by getting a part-time freelancing job. The more savings you have, the easier it will be for you to avoid foreclosure.

Organize A Garage Sale, And If Possible, Consider Selling Some Of Your Assets You Can Live Without

If you owe a huge sum of money on your mortgage, just some simple budgeting strategies may not prove to be enough to save your home. In that case, you can consider selling some of your assets that you can live without. This is particularly important when saving your home is your top priority. You can start by organizing a garage sale, where you can sell items that you no longer use at all but are still lying around in your home.

You can then move on and shortlist some assets that you are currently using but are not so important that you cannot live without them. It can even be your car. Once you avoid foreclosure and regain control of your finances, you can purchase those assets again. But, once you lose your home, it will be very difficult for you to purchase it again considering the rapidly rising property prices in the real estate market.

Last, but not the least, you should be wary of those companies in the market that claim to have a magic wand to stop your foreclosure immediately provided you pay them a hefty amount of fee. Avoid such foreclosure recovery scams. Always remember, you do not have to spend a fortune to get foreclosure prevention help. You are strongly recommended to contact either a HUD-approved housing counselor or a trusted real estate attorney to get free or low-cost advice on how to avoid foreclosure.

Photo Credit: List-foreclosures.com

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