As a homeowner, one of the worst financial and legal situations you can end up in is a home foreclosure. Foreclosures are very stressful processes, so it is important that you work hard to avoid this situation. Here are 5 ways that you can help to protect your home from foreclosure.
- Never ignore your mortgage problem. If you hit financial hardship and cannot pay for your mortgage one month, or if you haven’t yet paid a previous mortgage bill, don’t wait around and think the problem will disappear! Instead, be proactive and get in touch with your mortgage lender as soon as possible to inform them of this problem. The more communicative you are, the more cooperative your lender will be to help you through this situation. Often the lender will be able to develop a payment option for you to help ease the burden but also keep you on track!
- Do your homework. Make sure that before you talk to your lender or mortgage broker, you fully understand the terms of your lease. Ignorance is no excuse for late payments. Also, you don’t want to be surprised by extra charges or fees. Protect yourself and know what your responsibility is as the homeowner as well as what your lending company owes you as a client.
- Explore different payment options ahead of time. It is important that you sit down and crunch numbers before signing any lending agreement for a mortgage. You need to know how much money you have coming in each month as well as how much is left over after you pay your bills. Factor in home ownership costs such as home insurance, taxes and more so that you can estimate your monthly payments and determine if it is feasible for you to pay. Just because you were approved for a mortgage, doesn’t mean it is something you can realistically afford. Always consider your lifestyle and spending habits and be honest with yourself.
- If you are late on payments, to avoid foreclosure, you should also know which kinds of payment plans are available. Often lenders will offer short term as well as long term options. Short term plans allow you to catch up and make up for missed payments. Long term plans may involve adjusting the terms of your loan agreement to ensure it will continue to work for you in the future.
- Don’t get sucked in to scams! Unfortunately, there are people out there who will try to target people facing potential foreclosure. They will offer so-called “relief” programs that are meant to con you out of your money. Always consult your lender first since he or she can guide you in the right direction and help you to avoid fraud and scams.
As a homeowner, using these steps can help you to avoid home foreclosure so that you can protect your investment and your family. Be proactive, understand your loan agreement and terms, contact your lender early on if you cannot make payments, know your options, and be cautious of scams by consulting U.S. title records about your property title or your lender first.