We hope that you never find yourself in a situation where you are behind in your mortgage payments. Unfortunately, the unexpected can happen quickly. If you do find yourself in that predicament, here are some simple steps to take to avoid foreclosure:
1) Be proactive and don’t ignore the problem. It costs banks a lot of money to foreclose on a home, so they’ll do a lot to help you keep your home. Communicate often with them and be responsive to them as the further behind you get on payments, the harder it is to have options. There may be options your lender can give you to help you stay in your house or they can help you come up with a plan. Remember that just because you don’t open a letter from them doesn’t mean they didn’t send it!
2) Educate yourself. Open your mail, reading it thoroughly and look into various programs and options for which you might qualify. You should also know your rights as a homeowner and learn about the foreclosure laws in your state and the due process the lender must go through as laws differ from state to state. Contact your state’s Government Housing Office if you’re not sure where to start.
3) Reach out for help. Contact a HUD-approved housing counselor. The US Department of Housing and Urban Development can offer you free or minimal cost counseling anywhere in the U.S. to help you know your options and figure out your next steps. Reach out to a local real estate agent as well as some can help you navigate the road in front of you. Avoid foreclosure prevention companies who just want to make money off of you as they offer to negotiate with your lender!
4) Cut your spending. See if there are things you can cut to continue to make your mortgage payments on time. Oftentimes things seem like necessities but really can be cut. Gym memberships, cable, internet, eating out, entertainment, clothes, etc. often can be cut in emergency situations. You can even delay your other payments on your credit cards, for example, until you have paid your mortgage; just make sure to pay the minimum balances on those.
5) Sell some of your assets or find another job. Have you exhausted all of your means to making more cash? Could you take on another job temporarily? Or sell a second car? Or sell a life insurance policy? Even if they don’t bring in enough money to get you caught up on payments they may show your lender that you’re serious about trying to save your home no matter what it takes!