If you can’t keep up with your mortgage payments, then you’re at risk for foreclosure and a lender may send you paperwork to contact them. Here’s how you can avoid foreclosure.
You Can’t Ignore the Problem
You have to address this issue as you can’t get further behind in your payments. It will be harder to reinstate your loan and more than likely, you’ll lose your home. If you have a problem, contact your lender right away to work through your issues with them. The lender wants you to keep your home and have option to help you with difficult financial matters, but you have to contact them to discuss your individual issues.
Respond to Lender Mail
The first letters you get will provide options about foreclosure prevention. You need to heed these options as they can help you get out of a hard financial situation. Later letters may point to pending legal action, so you have to address the issues right away. If you fail to open the mail, this is not going to be an excuse you can use in foreclosure court.
Understand Your Mortgage Rights
Have a look at your loan documents. Tis will tell you what the lender may do if payments aren’t made. You need to understand foreclosure laws and the timeframe in your individual state as each one of the states is different. You can do this by contacting the State Government Housing Office. There’s foreclosure prevention which is also called loss mitigation that you can read about online as this will show you valuable options.
Contact a Housing Counsellor That’s HUD-Approved
HUD or the U.S. Department of Housing and Urban Development funds low cost or free housing counselling across the nation. These counsellors can help you understand the options you have and how the law works. They can organize your finances and will represent you in negotiations you have with your lender. To get assistance call (800) 569-4287 or TTY (800) 877-8339 to speak with one of these counsellors.
Get Your Spending Prioritized
You want to keep your home as this is a top priority. Make sure you review your finances and see where cuts to your spending can be made. You want to make your mortgage payments. You should cut down on optional expanses like television, entertainment, memberships and so on. Delay other payments until you’re able to make your mortgage payment and then work on the other bills.
If you have assets like a car, while life insurance policy, or jewelry that you may be able to sell for cash. This can help you reinstate your loan. You might be able to get a second job so you have more income to put towards the payments. If you can demonstrate to the lender that you’re making sacrifices, you may still be able to keep your home.
Don’t Work with Foreclosure Companies
Foreclosure companies charge you fees and you don’t need to do this. You will get companies looking to work with you, but this all costs money that you can’t afford.
READ NOW: How To Avoid Collections?
Put this cash down on your payment instead as these companies will charge you high fees, even as high as several months of your mortgage. Talk with a HUD counsellor as this is free.
There are companies which claim they can stop the foreclosure right away. If you sign paperwork that appoints them to act for you, then you just might be signing away the title to your property and become a renter in your own residence. Make sure you never sign documents until an attorney or a real estate professional has looked it over and that all the terms are understood. You should also discuss this with a HUD counsellor.