Up until now you have always been current on your mortgage payments, but you just lost your job, got a pay cut, there has been an illness in the family, a death, or a divorce, you have too much debt, children in college, or your interest rate reset on your loan and you cannot afford to make your mortgage payments. You are falling behind on your mortgage payment and your bills, and you are concerned that the bank may foreclosure on you and you have no place to move.
Foreclosure not only ruins your credit, it is financially expensive as well, and you lost your equity and a place to live. You may have to rent a place to live and moving costs are expensive. A foreclosure will make it harder for you to get a future mortgage and other consumer loans.
There is some light at the end of the tunnel. You may be able to avoid foreclosure and keep your home. Here are some tips that can help you avoid foreclosure and stay in your home in these tough financial times:
1. Speak to your Lender Immediately
You need to speak to your lender early on because it will save you time and money. The sooner you call the lender and explain your hardship situation, the quicker it will be for you to get help and save your home from foreclosure. Waiting only makes things worse and decreases your options. The longer you wait to talk to your lender, the more you fall behind on your mortgage and the fewer options you have to save your home from foreclosure and save your credit.
2. Don’t Ignore Letters and Phone Calls from your Lender
If you fall behind on your mortgage, it is only human nature to want to avoid your lender’s telephone calls, letters or default notices. It is smart to read and answer them immediately. Lender are sending out lots of valuable information to their customers giving them options to avoid foreclosure and save their homes. Do not ignore this important information because it may jeopardize your changes of keeping your home.
3. Cooperate with your Lender
If your lender offers you options such as refinancing, mortgage modification, or forbearance, try and negotiate with them a mutually agreeable solution. They are interested in helping you keep your home.
4. Seek Financial Counseling
The smartest thing you can do is to seek financial counseling early on so that you can make the best decision as to what is right for you. Start with the following:
- Make a budget and stick to it. Cut out unnecessary expenses. Find ways to cut costs and possibly earn extra income. Maybe sell something on E-bay, take on a second job something you can do at home in your spare time or evening hours when you are not at your primary job.
- Educate yourself on what your options are, your legal rights and responsibilities.
- Choose the best options for your financial situation.
- Cooperate with your lender.
- Choose a foreclosure attorney or other help or programs to avoid foreclosure. You can get a free consultation with a foreclosure attorney in your area.
- Get Financial counseling as soon as possible. There are many nonprofit housing counselors that can help you. Look for one that is certified by HUD (Housing and Urban Development Dept.).
5. Be Proactive
Protect your credit score. Negotiate with your lender a lower mortgage payment so that you will not become delinquent on your mortgage and avoid foreclosure. Doing nothing will not help your situation. Be proactive.
If you need legal assistance with a Foreclosure case, please consult with a Foreclosure Lawyer near you to discuss the details of your case. This website is for informational purposes only, and nothing stated here should be taken as legal advice.
