Feeling like your house has you trapped in a financial rut? You’re not alone. Even though the worst of the recession appears to be over, many Americans are still struggling to get back on their feet. This is complicated by high unemployment and even higher credit restrictions from banks. But don’t get too bummed out just yet.
Many programs with the means to help you get back on your feet either already exist or are being pieced together. On top of that, there’s a lot you can do to get back on your feet yourself. Read further for tips on how to avoid foreclosure while you wait for better financial opportunities to surface.
Face your problems
The first step to solving problems is facing them. Don’t let your financial problems creep up on you until their too huge to ward off. Instead, look them in the face.
To do this, start by taking account of all your financial accounts. Look up credit card balances, bank account totals, retirement assets, and whatever else you have. You should even take the time to count the cash in your wallet.
Once you know exactly where you stand financially (or exactly how far you’ve fallen behind), you’ll be much better equipped to get your financial priorities in order. This is especially true if you fear you’re facing problems meeting your mortgage payments. The further behind you fall, the harder it will be to catch up.
Connect with your mortgage lender and let them know where you stand
As soon as you sense you’re going to have problems meeting your mortgage payments, contact your lender. Don’t fear that your lender will try to take advantage of you. Lenders want to see you pay your mortgage and keep your house. After all, this means better profits for them.
Most lenders have programs that will help you through difficult financial times. And if they don’t have programs, chances are they will soon thanks to the surplus of recent government help in the housing industry.
Stay on top of correspondence from your lender
Make sure you open and respond to all mail received from your lender. Many of the notices they send you when you first encounter financial trouble will have helpful information about ways to prevent foreclosure.
In addition, some lender notices may contain announcements of impending legal action. These are the kinds of mail pieces you absolutely must respond to if you hope to keep your house in the end.
Be aware of your rights as a home owner
If you’re like most homeowners, you probably took the pages and pages loan documentation you received at your closing and filed them away without a thought. But if financial challenges are your reality, you’d be wise to dig those documents out.
Read all the information contained in your loan so you’ll be aware of the actions your lender can take if you miss payments.
You’d also be wise to study up on the laws surrounding foreclosure as well as the length of time the foreclosure process takes in your state.
Seek out helpful foreclosure prevention information
You can find a great deal of helpful information on foreclosure prevention simply by searching the Internet or reading up on documentation provided by the U.S. Department of Housing and Urban Development (HUD).
In certain situations, HUD offers free housing counseling to help you learn about all the foreclosure prevention options available to you.
Put your house first when it comes to spending
Aside from medical expenses, payments toward your house should be your top priority when it comes to allocating your money. Take a look at your personal budget and see where you might be able to trim back costs. Cut unnecessary items like your gym membership and cable TV subscription.
You should even look into deferring payments on your credit cards and other assets until you’re able to make your mortgage payments. Work with your credit card companies and other lenders for a suitable arrangement.
Stay away from foreclosure prevention scams
Any offer to help you avoid foreclosure in exchange for a fee is potentially a scam. Several companies hungry for profits will often target homeowners in precarious positions, saying they’ll negotiate a deal for you in exchange for a fee.
Though some of these companies are capable of good work, you’re better off putting your money toward your mortgage instead of toward their fee. This is especially the case considering you can gain the help of a HUD-approved housing counselor for no charge at all.
Waiting it guaranteed to end in foreclosure
Above all, you need to take action. Get on top of things and start making changes at the first sign of financial challenge and you stand a good chance of keeping your house.
