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Tips to Avoiding Foreclosure

Homeownership provides a sense of security.  It is something that is achieved after years of hard work and sacrifice.  There is security in homeownership.  Sometimes life events such as a loss in income can threaten that security and lead the homeowner toward foreclosure.  There are steps a homeowner can take to avoid foreclosure.  

If you are one of millions of homeowners who financed their home with an adjustable rate bad credit mortgage, you may already be feeling the pain of the higher payment.  If so, now is the time to consider a mortgage refinance.  Even if you are behind a payment, you may still qualify for a lower fixed rate mortgage.  By refinancing to a 30-year loan, you may be able to lower your house payment.  Since mortgage payments are made in arrears, you may be able to skip a house payment. 

You may benefit from mortgage refinancing with a cash-out refinance if you have equity in your house.  A mortgage professional can help you decide if this is a good option for your situation.  By taking cash from your equity, you can pay off debt or put it in savings to use for house payments down the road.  What you do with the cash is up to you, but using the money to better your financial situation can help you avoid foreclosure.  

Remember that banks and mortgage companies are not in the business of selling real estate.  They have a vested interest in keeping you in your house.  If you have an FHA loan, your current lender can help you with a streamlined refinance.  You may be able to refinance to a lower payment with minimal paperwork and closing costs. 

If you have done all that you can, and are still not able to make house payments, call your lender right away.  You may be eligible for a loan modification.  Consult with an attorney.  An attorney may be able to help expedite a loan modification or work with your lender to restructure your loan.  If foreclosure measures have already been started, an attorney may be able to slow down the process. In judiciary states, it can take up to a year before a lender can foreclose and evict a homeowner. The timeline is closer to 160 days in states which don’t have a court system to go through.  If nothing else, you may have to file for bankruptcy protection. 

Talk to a mortgage professional right away and find out what can be done to help you avoid losing your house through foreclosure. If your lender is aware of your situation, and knows you are motivated to keep your house, they may be more willing to help.  



  10 Steps to Home Ownership:

Step 1: Are You Ready?

Step 2: Hire a Realtor

Step 3: Get Loan Pre-approval

Step 4: Search for Homes

Step 5: Choose a Home

Step 6: Obtain a mortgage

Step 7: Make an Offer

Step 8: Insure Your Home

Step 9: Close the Deal

Step 10: Avoid Foreclosure


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