How to Avoid Losing Your House in Foreclosure
- Don’t let yourself procrastinate
- Respond to your lender immediately
- Be informed about your rights
- Make a budget and stick to it
- Can you liquidate other assets?
- Watch out for foreclosure prevention companies
- Seek unbiased advice from multiple parties
- Contact your lender as soon as you realize you’re behind on payments so you can avoid losing your house.
Looking for ways to avoid foreclosure? The financial pressure of owning a home may feel stressful. Take control over your house and security by following a few simple tips to proactively avoid a home foreclosure.
1. Don’t procrastinate.
The further you fall behind, the harder it will be to reinstate your loan and the more likely that you will not avoid losing your house.
2. Don’t ignore your lender, respond to their notices.
It may forestall having to make tough decisions, but don’t put your head in the sand. The notices you receive will contain important notices of pending legal action.
3. Stay informed of your rights.
Read your loan documents so that you know the consequences of not making payment.
4. Make a careful budget.
It’s easier said than done, but the most straightforward way to prevent foreclosure is to restructure your spending to stay current on your payments. See if you can cut things like TV, memberships, eating out, or entertainment. Hold off on paying down credit cards and other debt until you have paid your mortgage.
5. Consider liquidating and making use of extra assets.
If you have extra assets such as a second car, jewelry, or a life insurance policy, you can sell these for cash to help reinstate your loan.
It may not get you out of the red, but at least it will show your lender that you are acting in good faith.
6. Avoid foreclosure prevention companies.
Don’t pay unnecessary fees for foreclosure prevention assistance–use that money to pay off your mortgage. There’s a million for-profit companies that will contact you promising to negotiate with your lender. If this is the only service the company offers, then it isn’t worth it.
A company like Super Savvy Home Buyers performs this service for free.
7. Work with someone you can trust.
Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender. There is a lot of good advice out there, you just have to take it.
8. As soon as you realize you’re behind on payments, contact your lender.
Lenders want cash, they don’t want to get stuck with your property.
They will bend over backwards to get you back on track, it’s better for their bottom line.
You can also gather more information at Hud.gov — https://www.hud.gov/
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