Avoid Foreclosure Through These Simple Steps
Foreclosures are like teeth cavities. The best way to avoid foreclosure is to treat your house loan the way you protect your teeth Ė by putting more emphasis on prevention rather than cure.
Hereís a run-down of things you can do to avoid putting yourself in such a dire situation.
1. Save for a rainy day
The financial demands of daily living can sometimes be a strain, but most of us have the opportunity to put a little something away in case of emergency. Scrimp for a few months if you have to. The difficulty you experience will be more than worthwhile once those rainy day come and you are prepared. Ideally, save six monthsí worth of mortgage payments.
2. Arrange a House Equity Line of Credit
When foreclosure looms, your options can disappear pretty fast and money is hard to come by. With a home equity line of credit in place, perhaps as many as 90% of all foreclosures can be averted, like having a fire extinguisher when things get too hot. Interest rates on equity credit lines are low and you will pay next to nothing if you donít access the line.
3. Make all your mortgage payments
Right, this is a no brainer. However, all roads to foreclosure begin with missing one mortgage payment, and it happens all the time. Do not miss that first payment.
4. Always ask for help
The last thing we want to tell our parents, siblings and friends is that we are in deep trouble and need their help. But when our house is on the line, pride, shame, fear and embarrassment must take a back seat. People can sometimes surprise you.
5. Always answer your lenderís calls and letters
It is certainly easier to avoid the embarrassment and discomfort. But the last thing you want your lender to think is that you are the sort of person who just disappears and refuses to communicate, especially if foreclosure negotiations become inevitable down the road.
6. Explore all options
There are many options you can explore before you lose your house to foreclosure. Explore them all and refuse to be daunted. And remember, the sooner you explore your other options, the better it will work out for you.
7. Donít stop payments
Although youíve missed a mortgage payment, donít miss the next one Ė even if you can only pay one month instead of two. It is important for the bank to know that you are determined to make payments. Besides, payments snowball every time you miss one and that makes it even more difficult to avoid foreclosure.
8. Always meet bankruptcy deadlines
A Chapter 13 Bankruptcy plan, when approved by the courts, always stops a foreclosure. Do not miss a bankruptcy filing deadline.
These simple steps can help you avoid home foreclosure. Do not underestimate them.
In closing, borrowers should bear in mind that being able the property quickly is still one of the best ways to avoid foreclosure. So always keep an eye out for opportunities and prospects who may be interested in buying your house. And remember to be open and honest about your financial situation. Deception is the biggest stumbling block to successfully selling oneís home.
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