Have you been missing out on your monthly mortgage payments for a while now?
Don’t take this lightly – You may be at the risk of a foreclosure
Millions of Americans are at risk of foreclosure because of non-payment of their mortgage amounts on time. Nevertheless, the good thing is that it is possible to avoid foreclosure. Here are a few tips, following which you can save your dream home from going into a foreclosure:
Explore your options
You are probably in this situation because you didn’t quite go through the terms of your loan well. Or there might be a huge change in your financial situation now. Whatever it is, it is very important to understand your current situation and explore the options you have. You can refinance your loan by going for a new one at a lower interest rate. You can reap the benefits of the many solutions that government provides for distressed homeowners. You can sit and discuss things with your lender and check if he is agreeable to modify your loan, either temporarily or permanently.
Make sure your credit is intact
Credit is the only thing that gives you the negotiating power when it comes to avoiding a foreclosure. So, call your lender while your credit is still intact. Even the major lenders such as Bank of America, Countrywide Financial, Citigroup, JP Morgan Chase, Wells Fargo and Washington Mutual suspend their foreclosure process for about 30 days if you are a qualified borrower with a decent credit rating. Once you lose your credit you will be in no position to avoid a foreclosure.
Pursue assistance from experts
Avoiding a foreclosure is by no means an easy job. It can take a lot of time and a lot many phone calls. At such times, if someone can help you it has to be an expert in the field. You will find many HUD-certified housing counsellors and loan modification counsellors who can come to your assistance. In fact some of these might even get directly in touch with you via loan modification leads. They can work out plans and assist you in convincing your lender to modify your loan. All that you need to do is keep pursuing them until your job is done.
Try keeping your payments current
Many borrowers make the mistake of paying off their credit card bills before they make their monthly mortgage payments. You may not hear from your bank/lender as soon as you miss your payment, the way you do from your credit card company. Nevertheless, avoiding a foreclosure should be your top priority. Yes, you do lose out on your credit score if you miss your credit card payments; but by missing out on your monthly mortgage payments, not only will you damage your credit score, you will also be left with no place to live in.
Cut down your expenses
In order to avoid a foreclosure, you will have to convince your lender that you are not in a position to afford your monthly mortgage payments. They may want to see you making a couple of sacrifices, which means you will have to get rid of those luxuries you have been enjoying till now. You need to be prepared to cash in your assets, such as your car or your jewelry. You may have to draw up a detailed account of your expense and see where you can cut down. Assemble all the documentation you can that will help you convince your lender of your current financial position – your tax returns, your benefit statements, your pay stubs, etc.
Although a refinance option might help you save your home, loan modification is your best bet when it comes to avoiding a foreclosure. Not only is this a permanent solution to your problem, you don’t have to worry about paying any extra fees. You can ask your lender to lower your interest rate or lengthen your amortization schedule so that you monthly payments become affordable. You may even agree to go through a three-month trial period to establish that you can afford your modified monthly payments.
So, next time you get a call from a loan modification counselor who might come to you through loan modification leads, don’t just cut the phone saying you are busy. He might offer you the exact help you are looking for, to avoid a foreclosure situation.
