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Your Ultimate Guide to Avoiding Foreclosure

If an individual fails to pay the home mortgage, such conditions can lead to a mortgage.  Foreclosure can be simplified as legal means by which a lender can take over your property. This can result in moving you out of your home.

If your property is not worth the price, you will need to pay your mortgage loan and an extra amount to fulfill the loan. So, foreclosure can seriously affect your financial stability.

Owners of the home who fall behind on their mortgage will be at the risk that their home would be taken away by the bank or by a lender through the process that is known as foreclosure. This process does not always take the home away, but it is better to avoid this process.

Those who suffer from foreclosure faces issue like not buying another home for a selected period. There are a few steps that you can take to avoid foreclosure.

Some steps can be taken to avoid foreclosure:

Eleven Tips to Help You Avoid Foreclosure

1. Don’t Ignore the Problem

The more you ignore your loan, the more you will be stuck in your loans and lose your house.

2. Contact your Lender

As soon as you get aware of the problem, contact your Lender as they can help borrowers through difficult financial situations.

3. Respond to Lenders

You will receive additional notices that you ought to reply to in your mail to avoid any problem.

The first mail will be on the options of how to avoid foreclosure and later may include important notice of pending legal action. So be vigilant about emails.

4. Knowing your Mortgage Rights

Learn about mortgage rights so that you can easily avoid the foreclosure situation.

5. Contact Housing Counselor

The US Department of Housing and urban development funds free housing counseling nationwide. It assists in helping you understand the law and how to organize finances, and how to negotiate with your Lender.

6. Using Assets

If you have an extra car, some jewelry, or additional property, you’re in luck. You can use these assets to bring cash that can help reinstate the loan.

If anyone at your home can get an extra job to bring some income in the home, that can be very helpful in paying off debt. It is a good sign for your Lender to consider that you are willing to sacrifice everything to keep your home.

7. Avoid Companies

It is better to avoid foreclosure prevention companies as they charge fees.

Avoid paying them. Instead, you can use that money to pay off your mortgage. These are profit companies that charge hefty fees to keep their business running. You can save that money by acting wisely and seeking help from the US Department of HUD as they assist free of charge.

8. Beware of Scams

If any company claims that they can help you stop the foreclosure immediately, you have to sign a document.

Never do this as they will take control over your property, making you live on rent in your own home. It is advised to read and understand all the terms and conditions before signing any legal document.

Some scammers use the fear of foreclosure to prey on homeowners. They make fake promises that they will save you from foreclosure, taking money in advance and doing nothing later. Instead, you lose the money that you could use in compensating mortgage.

Watch out for these scams and avoid them as much as possible.

9. Work out a plan with the Lender

Many lenders work with borrowers who are having trouble making their mortgage payments. Contact the Lender to discuss suggestions and options on how to avoid foreclosure:

A lender may, for some time, reduce or suspend the borrower’s mortgage payments for a certain amount of time. The borrower will pay the amount later, but he can get relief for some time.

Loan payment can be modified by changing the terms of the note to make the mortgage more affordable.

Refinance is an option available when there is enough equity in the home to pay off an old mortgage by using a new mortgage.

10. File for Bankruptcy

If a lender has already initiated the foreclosure process, a borrower can delay it for some time by filing for bankruptcy.

All debt collection activities stop for a certain time during bankruptcy, including foreclosure. This delay can be helpful as the borrower gets the time to collect extra cash to pay off debts.

11. Sell the Home

Selling the home is the best option when a borrower can no longer afford it. If the home’s value is increased since its purchase, then the borrower can put the home up for sale and repay the Lender.

If you’re still unsure about the mortgage process, then consider speaking with an attorney specializing in foreclosure in your specific area.

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