Face The Facts.
The fight against foreclosure begins when you miss a single monthly amortization. There are lots of ways you can prevent foreclosure and the number one thing you can do is act fast. Ignoring the fact that you missed a single payment will escalate the problem to disastrous proportions.
Missing a single monthly amortization can be a symptom of an ominous financial situation looming ahead. You have to be honest with yourself, because in the end, it will be the moves that you make, that will allow you to win or lose the battle for your house. Yes! This could very well turn out to be a legal battle to save your beloved home.
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Knowledge is Power.
In order for you to figure out the best moves, you need to educate yourself. There are professionals who are seasoned and well- informed, who can help you. There are the so called foreclosure specialists and the bankruptcy attorneys who are two of the most common professionals to approach. Some who ignored contacting their lender lost their home, for the simple reason that they did not know how to stop their lender from foreclosing on their property. Foreclosure specialists are your best source of knowledge when it comes to exploring your options in a more or less friendly environment with your lenders. Your lenders will usually sit down with you, if there is a showing of hope that you can make guarantees acceptable to them.This is so because they are a financial company that deals in moving money. If they get your house, that is a money which is not useful to them.
Bankruptcy attorneys are legal professionals who can help you with the legal battles involving stopping generally all creditors from harassing you. Bankruptcy essentially is a remedy for the debt stricken by giving them a fresh start. They do not stop foreclosure per se but they can stop the process of foreclosure. Bankruptcy filing can give you a relief against creditors which may not involve saving your home but give you a fresh start nonetheless.
Foreclosure specialist and bankruptcy attorneys usually give free initial consultations. You can take advantage of this to gain more knowledge and then cue your personal research, based on what you have gathered from talking to these people.
Doing it Yourself.
Assuming that you did act fast and you are just on your first or second monthly missed payment; you can always take the risk of talking to your lender on your own. If you generally have a relationship with your lender that can be characterized as mutually helping,and with your stock knowledge of what really are your rights and options, talking to the lenders personally may not be a bad idea. After all, you already have a relationship of trust when they granted your house loan/mortgage.
Talk to the Right Persons.
When you contact your lender, be sure that you talk to the right person. Start with the people that you know, like the person handling your account. Having constant communication at the earliest sign of missing any loan payment can secure you the kind of relationship which can save your home from going to the foreclosure departments. The people that you talk to at the loans departments level or your accounts level are far more approachable than someone you don't know in the foreclosure department.
Stay Connected.
When you keep the communications open, then your lifeline or helpline to keeping your home is definitely kept alive. Again, lenders do not want your home and will be more than willing to explore options for you to keep making your payments. Without their client's cash it will be a bad situation for them too. So it is a win-win situation actually to keep foreclosure from happening, but they need concrete payments. Keeping the lines open will accomplish two things: one, is that you show you are serious about avoiding the foreclosure process and that two, you show your willingness to do everything in your power to avoid the foreclosure stages.
Be Honest About Your Financial Situation.
Be honest about the state of your financial affairs. Remember that you will have to guarantee that you can make payments or they will find no use in talking to you. They may not be willing to talk to you in friendly, helpful terms if you are less than candid about your capacity to pay.
Your lenders were in this business long before you and this won't be the first time that a client has missed payments. There is much to learn from them and if they know exactly what the state of your financial affairs is, then they can find the best solution for you.
Solutions that You May have Read or Heard.
1. Loan modification process - The adjustable interest rates that were so enticing not so long ago might now be killing you and you can ask your lenders to switch you to fixed interest rates. It may be worth checking if you qualify.
2. Interest only payment - At least, you will not be slaughtered with mounting interest. After all you already owe the principal and you have to pay it one way or the other.
3. Soft payment - This is where lenders allow you to pay a lesser monthly payment of an amount you can afford without interest.
4. Short sale - If you have a home that is honestly more than your means can afford, you can move into a more or less affordable home. A short sale will definitely stop foreclosure and any bad record of it in your credit report.
5. Combo alternatives like giving you reduced monthly repayments with the option to pay off the principal when you are able.
These are just a few, but there are many more ways that lenders and homeowners can think of. Some creative ways are being added to the list as more and more people get hit by the economic disaster. Before you agree to any terms, make sure that you have covered all the angles and have concluded that the choice you make is the best course of action for you to take.
Practical Tips on Getting your Finances in Order.
Now is maybe the time to take control of your expenses. This is especially true if you are the kind of person who wonders where the money is going every month.
1. Write a budget - This is perhaps the only sensible way to track down your money.
2. Cut back on unnecessary expenses - People may not want to help you in the first place if you are careless about how you spend your money.
3. Find extra income - Nowadays, it is a trend to have more than one steady job and maybe you sell items you do not need.
These tips basically prescribe a lifestyle change and maybe it is high time to take a hard look at how you live your life too. You may have piles of debts that up to now you have managed to juggle, but the economic crisis just messed up your handle on things.
You have probably heard people talk about the bad habit of living beyond their means. The best way to avoid being on the way to foreclosure is a sound budget. If you now have a solution to avoid foreclosure, it is time to focus on how not to be in that situation again, if you can possibly help it. Set a budget and live by it. Make sure that you are in steady control of your finances and avoid what would have been avoidable financial pitfalls coming your way. It needs a strong discipline not to be enticed by what we see in the stores etc.
But all these are just tips. Losing a job is a very hard obstacle to overcome and the cause of many foreclosures in the US. Job loss is at historic highs and there seems to be no relief in sight. It is better to take an ounce of prevention than a pound of cure, so the saying goes. Being well prepared is one thing that you can do to have a strong foundation for any financial eventualities in the future.
There are many things that can eat up your budget and if you have made preparations you can save your home. There are insurances, social security contributions and savings which could help towards your monthly payments.
Home foreclosure is a very real consequence if you do not make or are unable to make the monthly payment due on your home. Plan your finances well and be prepared both with the ordinary and extraordinary happenings that could derail your budget.
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