5 Must-Know Tips on Avoiding Foreclosure

Did you know that there have been about 6.3 million foreclosures in the United States in the last 10 years? According to MarketWatch, many Americans do not take the necessary precautions to protect their property from foreclosures.

If you are in a situation where you feel that you could lose your home, there are some steps you can take to avoid foreclosure. Read on to learn more.

Read the Emails

The process of repossessing residential property is rigorous and procedural, which means that your lender will not just wake up one day and force you out of your home. Usually, the company will send several emails to notify you that you are getting behind on your mortgage payments while suggesting different options that you can pursue.

If you ignore the emails, you will only make the problem worse and won’t avoid foreclosure once the matter goes to court. You cannot use ignorance as a defense against the repossession. Claiming that you have not been opening your lender’s emails only solidifies their case against you.

Know What to Expect

Your loan documents have valuable information regarding what the lender can do if you fail to make timely payments. You need to learn about foreclosure laws and the timeframes provided in your state through the State Government Housing Office.

With proper knowledge, you can plan accordingly to possibly avoid a deficiency judgment, leaving you in additional debt despite losing your property. Such situations arise if there are major repairs to be undertaken since lenders are not capable of selling homes as-is.

Foreclosure Prevention Options

Aside from the suggestions that your lender may provide, there are some tested and proven mechanisms that you can pursue to avoid foreclosure or mitigate the potential loss. A careful online search will help you in this aspect.

Remember that you do not have to hire foreclosure prevention companies. You are better off using the money to pay off the mortgage. Such efforts will show that you are committed to keeping your home and may give you some leverage in court.

The HUD-approved counselor in your state will provide you the necessary advice for free. The counselor could even offer some form of representation, especially if you have been making the necessary efforts to pay off the mortgage.

Assess Your Assets

If you are faced with possible foreclosure, it is time to think about the things you can sell to reinstate your loan. You may not see it, but there are some of your possessions that could go a long way in offsetting the mortgage. If you have a second car, a whole life insurance policy, or jewelry, you can use such assets to avoid losing your home.

You may also cut some expenses to eliminate to free additional cash such as television cable, music concerts, and annual vacations. Getting rid of these expenses can avail cash that you did not realize you had. If you’re in a position to get a second job such as providing freelance home repairs, go for it and channel the cash to the mortgage.

These changes to your lifestyle demonstrate to your lender that you are making efforts to keep your home. While the aim is to offset the loan and avoid foreclosure, you are also making a convincing statement of commitment to the lender.

Be Proactive

In many situations, people lose their property by ignoring the problem until it is too late. If you keep ignoring your financial situation and failing to renegotiate your loan with the lender, you will not have much to fall back on when the legal notice arrives.

You also need to contact the lender as soon as you realize that you may not be able to pay your mortgage on time. Remember that lenders are not interested in your house, only their payments, and that is why many of them have mechanisms to help borrowers get through tough financial times to avoid foreclosure.

Final Word

Foreclosures have become a common phenomenon in America as more and more people fail to keep up with their mortgage payments due to financial hardships. The most important thing is to stay active in your payments while communicating with the lender about your options. Contact us today if you are looking to sell a house fast in Savannah, GA.

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