Facing foreclosure can be a scary time. Sometimes missing payments is unavoidable, but to avoid losing your home, there are certain actions you should be taking. Not sure where to start? Fortunately, this article takes a look at a few of the steps you can take to ensure the best outcome of your financial situation.
- Ensure you receive the proper loan in the first place. One of the reasons homeowners lose their homes is because they were given an unaffordable loan in the first place. Make sure you fully understand the terms of your loan and can actually afford it.
- Get rid of luxuries. If you’re struggling to make payments, getting rid of things like cable and other unnecessary subscriptions will help you come up with some extra cash. Making sacrifices will show servicers you’re really making an effort to make ends meet.
- Get a detailed record of your expenses. Keep all pay stubs, tax returns, receipts for large purchases, and benefit statements. You’ll need to show an accounting of your expenses to the bank.
- Do your research and look into various mortgage workouts. If you qualify, refinancing into a longer mortgage with a lower rate would be the best option. Unfortunately, some people may not be able to afford the fees required to do this. You could also consider a loan modification, in which a lender lowers the interest rate and lengthens the payment schedule.
- Make sure your home is worth saving. If you have extra mortgages and home equity lines of credit, restructering your mortgage might make your payments more than your home is actually worth. If you owe more than your home is worth, it may be time to consider selling. This is an option that would allow you to salvage your credit and allow you to move on with your life without being evicted from your home.
- Consult an expert. Consulting a housing expert or a lawyer will ensure you take the necessary steps to avoid losing your home. They work with thousands of homeowners every year to reduce the all too common situation of foreclosures. In fact, in 2013, one in every 96 homes reported at least one foreclosure filing. The job of a housing expert or a lawyer is to do everything they can to help a homeowner choose the best option for their personal housing situation.
- Put your home on the market as soon as possible. If you do decide selling is the best option for you, find a credible real estate agent to help you sell your home as quickly as possible. The sooner you sell your home, the less damage will be done.
Sometimes foreclosure is unavoidable, but it’s important to do everything you can to ensure you get the best outcome possible. You’ll have to be patient and spend time, money, and effort in order to save your home.