If you are sitting at home worried about how can I avoid foreclosure on your home, that is the wrong thing to do. Sitting and thinking about the problem will not make it go away.
You need to start doing something about it before its too late and the bank comes and takes your home from you.
You need to start opening the letters being sent to you by the bank and communicating with them to see what they can do to help you. Remember the bank is in the business of making money.
They don’t want your home, they are only interested in getting the borrowed loan paid back in full. One of the first steps you need to do is get out of denial and self-loathing. Unfortunate situations like these happen to the best of us.
Like they say when life gives you lemons you make lemonade. Get going, make sure you find your mortgage documents and read them thoroughly to know what to expect when you don’t make your payments.
Related article: What is a Pre-Foreclosure in Houston?
If they have just begun to issue notices of non-payment, they haven’t issued the foreclosure yet. But if you ignore the pending legal action letters, that is no excuse in court. You may still have time to handle this situation and avoid a foreclosure on your credit report.
Work With The Government
Contact your state to learn more about the foreclosure time frame you are dealing with. When you learn the time frame and the different steps of foreclosure and compare that with what letters or other communication from your lender, this will determine how quickly you need to move to secure your exit strategy.
The Federal Government’s Housing of Urban Development department has a handful of programs that may offer you a way out of your situation. A lot of these programs are determined on the home’s value versus how much is left on the loan.
HUD also has counseling options available to help you. This will help you understand your financial situation and what options may or may not work for you. There is a lot of information out there that can help, you have to be willing to go and find it.
Another way to avoid foreclosure is to take a long, hard look at your personal finances. Design a budget that will fit your basic needs like food, gas and mortgage payment. Skip the payments on optional or unnecessary items, like credit cards or expanded cable packages.
Maybe opt for a cheaper phone plan and skip eating out. You might have to consider ways to make extra money, such as getting an extra job or find odd jobs to do on social market boards or other local listing sites. Good sites you can use to find gigs online are Fiverr or Upwork.
You may also want to take a look at your home furnishings and sell the higher quality items to make a little extra cash. These options are great if you have a temporary hardship and are expecting to be able to make your mortgage payments more successfully in the next few months.
Rent Your Home
A creative way to avoid foreclosure is to rent out your house to someone else. Their rent payment now becomes your mortgage and insurance payment.
That means you would have to find somewhere else to live that is more affordable. You could also rearrange your house to allow for a roommate to share your house and, depending on the amount of your mortgage payment, they might be able to pay a large portion of it to make it more affordable for you and fit better in your budget.
This might not feel very comfortable, but you’re in a tough situation and you need to explore outside the box thinking.
On the other hand, renting out your home may lead to additional headaches from your renters and potential damage to your home.
The most simple way to avoid foreclosure is to nip it in the bud with a short sale. There are lots of investors waiting for short sales to come on the market. This is where the bank will negotiate a sale price with a buyer and sells your house short of what is owed on it.
Trust us, the bank does not want to own your house. They will usually take an offer that is close to the loan principal, even if the home is worth more than what is left. This makes for a great investment opportunity for buyers with cash on hand.
Facing foreclosure is a tough situation, but don’t make it worse by sitting on your hands and doing nothing about it. Get active and seek the information you need to make and educated decision. Remember the bank doesn’t want your home just your money. So find away to get them the money they want, so they don’t take your home.
DO YOU WANT THE BANK TO TAKE YOUR HOME?