Millions of Americans have acquired their homes through mortgages. While at the time of taking up the mortgage you had a clear financial future. Things might have changed along the way. Financial distress is unavoidable sometimes. The only problem which arises however is when you are unable to service your mortgage. In such scenarios, you will be scared that your financier will come for your home. Also, if you take up a loan using your house as security, your financier is going to charge your home. Failure to service your loan might lead to adverse measures like the sale of your house to recover the money owed. Therefore it can be said you are facing foreclosure. The good news however is, there are some tactics that you can use to avoid foreclosure. To help you find an answer to the questions ringing in your head about foreclosure. Here is a solution for you.
Get in touch with the lender as soon as possible
Remember if your lender is a financial institution, their right to sell your house is statutory. Meaning the lender has a right to foreclosure. Therefore the very moment you realize your financial situation has changed should be the very time you act. Don’t wait, the sooner you reach out the better for you. Most lenders after having accessed your new financial situation might review the terms of payment. If you are lucky enough you might be given a timeline that will allow you to work on your finances before you start repaying the loan. Also, when you reach out fast enough you get to show your lender your genuineness.
Do some legal consultation
Foreclosure laws vary from state to state. Therefore get to know which laws are applicable in your state. Also, the contractual agreement between you and your lender will always provide recourse measures. Always keep a copy of the contract and read through it. However, legal documents can be hard to understand more so if they are filled with lots of legal jargon. Here is where the role of an attorney comes in. Consultation might cost you a few dollars in legal fees but you will get a better understanding as to what legal options you have.
Eliminate unnecessary expenses
Know what matters in your life. Is it spending money on fuel for your two cars or keeping your home? Two cars and an unpaid mortgage might seem as irresponsible on your end. You can decide to sell one of your vehicles and use the proceeds to pay some installments on your loan. If you don’t have multiple vehicles. You can agree that some things in life like a golf club membership, cable television among several other things are just luxuries. If these things were taken out of your life you can survive. You won’t realize the difference money spent on luxury can make until you are in a fix and that is all you got to pay your loans. Simply put, eliminate what you don’t need and use the money to pay your loans.
Prioritize your loans
When most people are behind on loans and the lenders haven’t come calling, they tend to block out the thoughts on the loan. Big mistake! As much as thinking too much can be detrimental to your mental health. Do the little you can when you can. If you commit to making payments even in a particularly small amount, your efforts will be recognized. When you completely fail to pay and also fail to reach out. You will just be regarded as a voluntary defaulter. Most times it will become more difficult for you to build a good credit record later on. Always remember that loan situations get to arise in different phases of life. Having all financiers turn you away can be frustrating.
Be responsive to your lender
The phobia that comes with receiving phone calls from lenders or replying to emails is understandable. However, a time comes in the life of a human when you have to choose what is important. Dodging your lender or facing the problem head-on? Apart from the first call from your lender after default being purposefully to ask you to pay. Such calls also get to allow you to argue your case and ask for leniency on the payment terms. When you go mute and become all unresponsive. Staying quiet is simply treated as unwillingness to pay your loan. Therefore when your lender emails you about your loan status, the least you can do is respond. If you miss their call, call back.
Don’t pay money to avoid foreclosure
Desperate times call for desperate measures. When you are at your lowest financially and you are on the verge of losing your house, there is a possibility to go far and beyond to try and avoid foreclosure. Some companies will give you options for helping you prevent foreclosure. Such an offer can be exciting but their services don’t come free. Instead of paying a company to help you prevent foreclosure, the best you can do is using that money to pay your loan. As earlier on stated, small efforts on payments will always show your willingness to pay. When you are facing foreclosure, the last thing you need is spending money on scamming services. Use every extra money you have to reinstate your reputation with your lender through the payment of your loans.
Make an application to the bank for modification of your loan
Maybe you were not aware of this but yes, you can apply for a modification of your loan. One fact that you need to be aware of is that lenders are barred from exercising foreclosure when a loan is in the modification stage. Also, the government has measures in place meant to help citizens avoid foreclosure. The MHA (Making Home Affordable) is a government program for people looking to avoid foreclosure. The program also gets to help citizens in fear of foreclosure to find ways out of the mortgages. With the help offered you can always avoid foreclosure situations.