In today’s challenging economy, many homeowners are struggling to pay bills and maintain mortgage payments. One of the worst outcomes can be foreclosure. Fortunately, there are ways to prevent foreclosure if you catch it soon enough. Let’s take a look at what you can do to protect your home from foreclosure.
What is Foreclosure?
Before we talk about how to prevent foreclosure, it pays to know what it actually is. Foreclosure is the legal process that allows your bank or lender to repossess your property and sell it off to recover the money you owe on your loan. In most states, they will go through the courts first to get a judgment before proceeding with foreclosure proceedings.
Understand Your Rights As A Homeowner
First and foremost, make sure you understand your rights as a homeowner in your state. Laws governing foreclosure vary widely across the US, so you need to be aware of the laws in your area. This includes any special protections put in place for homeowners like the one found in California, which gives homeowners facing foreclosure up to 2 years to pay off their debts without having their home taken away.
Contact Your Lender Before You Get Too Far Behind
If you think you’re going to have trouble making mortgage payments, the best thing you can do is to contact your lender immediately. Most lenders would much rather work out an alternate payment plan than resort to foreclosure. While this may wind up costing more in the long run, it’s often worth it to avoid being placed in foreclosure. This could mean extending the terms of your loan, lowering your interest rate, or modifying your payment plans.
Review Your Finances & Make Necessary Changes
Once you’ve talked to your lender, it’s time to review your finances and make any necessary changes. If the cause of your foreclosure is due to debt problems, reviewing your budget and cutting back on unnecessary expenses can help you stay afloat. You may also need to look for alternative sources of income or find a different job.
Look Into Government Programs For Help
Many states and cities offer government programs that provide assistance to homeowners facing foreclosure. For example, some states have “mediation” programs that allow borrowers and lenders to come to a mutually beneficial agreement, while other states offer financial incentives to encourage lenders to avoid foreclosure. There are also federal programs such as the ‘Making Home Affordable’ program that may be able to help. It never hurts to explore these options, even if you don’t think you’ll qualify.
Seek Professional Advice If Necessary
If all else fails, seeking professional advice from a real estate lawyer or a housing counselor is a good option. They can explain your options to you in more detail and help you find the right solution for your situation. They also can help you understand the process of foreclosure as well as any legal rights you may have as a homeowner.
Facing foreclosure can be a frightening prospect, but the good news is that there are steps you can take to prevent foreclosure. It’s important to act quickly and consult experts who may be able to help you out of your predicament. By staying informed and taking action now, you can keep your house and avoid foreclosure.