Failing to keep up with your monthly mortgage can put you in a very dangerous position – foreclosure. If you find yourself in this situation, don’t lose hope. There are still some steps you can do to straighten things out. Consider the following measures that can help you avoid foreclosure of your home:
Analyze the Situation.
Foreclosure
If what got you into this mess is ineffective management of your finances. It’s time to take a good look at how you’ve been handling your income and make the necessary changes now. Have your pen and paper ready and calculate the debts you owe from your mortgage lender. How much from this total do you think you can pay for the next few months?
Next, list all your expenses for an entire month and compare this with your monthly income. You need to cut back on your monthly spending in order to make up on your mortgage. Perhaps you can give up your cable for the meantime, avoid long distance calls, cut back on your electricity bills, cut back on your groceries and other unnecessary spending. Calculate how much you can compromise as payment for your loan.
Talk to Your Lender.
Do not hesitate to speak with your lender right away. Explain your current financial situation and let your lender know that you’re doing all you can to catch up with your payment. Most lending companies do give Forbearance or extend your payment’s due date at a later time. You can also ask for a reinstatement of your mortgage. A reinstatement enables the borrower to submit payment after a certain period depending on the arrangements made with the lender. Usually, lenders are willing to give borrowers a chance instead of repossessing their properties immediately.
Refinance Your Home.
You can apply for refinancing in order to pay off your existing loan. Ask your lending company if they can work out a refinancing arrangement for you without having to go through the whole process of re-applying again. Some lending companies allow this, especially for those who are in extreme financial crisis due to circumstances beyond their control such as losing a job or a serious illness in the family.
Look for other possible solutions.
Once you’ve made a new payment arrangement with your lender, do your best to live up to your promises. Remember, you need to come up with sufficient amount of payment before your new deadline ends. Your possible options might be to borrow extra money from a friend or a relative or take a second job. If these options are not possible, then you can also consider selling your home.
Don’t rush into any deal without seeking assistance from your lawyer.
Some people who are facing foreclosure have the tendency to accept deals from other people. This is especially true if you’ve decided to sell your home prior to foreclosure. For instance, you receive unreasonable offers in exchange for your property. Because present situation, you might be taken advantage of without your knowledge. To be sure, never sign any contract without having your personal lawyer ensuring that the terms are fair and legal.
