Five Tips to Save Your Home When Facing Foreclosure
Since the worldwide economic downturn, more homeowners have been facing foreclosure. Because banks can begin foreclosure proceedings after only a few missed payments, homeowners must act quickly to avoid losing their homes in this situation. Here are five tips for saving your home when you’re facing foreclosure.
1. Talk to Your Lender
As soon as you realize you can’t make a payment, call your lender. Never wait to be contacted by your bank first. If you can provide bank statements and other financial data, your lender will most likely work with you by giving you a longer grace period or letting you skip some payments. In some cases, lenders also let homeowners make smaller payments for as long as 18 months. It’s important to remember all of these actions will result in having to pay more later on.
2. Ask for Assistance
Debt management and credit counseling programs with housing counseling may help you keep your home when you’re unable to make payments. Some services charge much larger fees than others, so be selective when choosing. An attorney can also provide valuable help when foreclosure is looming because of deceptive actions by lenders.
3. Have Your Mortgage Refinanced
Having your mortgage refinanced can be an especially good choice if you have a high-interest mortgage and interest rates have gone down. By changing your mortgage type or lowering your interest rate, you might be able to make your payments more easily. Because of points, closing costs and other expenses, refinancing isn’t necessarily cheap. In addition, some lenders prey on homeowners facing foreclosure, so it’s important to stay alert when you look for help in this area.
4. Have Your Loan Restructured
If your financial circumstances have changed permanently, the long-term solution of restructuring can be an excellent option. The process involves negotiation to have the loan’s terms extended, making payments more affordable as a result. This option can also reduce a loan’s interest rate and distribute delinquent payments over a number of years.
5. Sell What You Can
If none of these options can provide an optimal solution for you, you might want to consider selling non-necessary items. For example, selling a car you don’t need can make a big difference towards being able to make house payments, especially if you have a loan for the car. Look for any and all ways of saving money while cutting costs. Still, selling possessions and saving money may not help enough if your financial difficulties are here to stay.
Foreclosure is never somewhere one plans to be. When you first start looking for real estate for sale you think of your new home, new memories, and a sense of longevity comes with the home buying process. However, this may become a reality with life’s unexpected twists and turns. Talk to your loan officer to make sure you are not buying more than you can chew, but don’t let the fear of foreclosure keep you from buying a home.