If you have been going through financial difficulties such that you can no longer pay your mortgage loan, you need to plan on how you will avoid losing your home. The last resort will be selling your home to pay the debt or give the home to the lender. If you are running against time, you should know how to sell your home fast. However, before you come to this last resort, here are three things you should do to prevent foreclosure.
- Communicate with your Lender
When you realize you have financial problems and you cannot be able to pay your mortgage on time, the best thing to do is to communicate with the lender. This is important if you had a setback that prevented you from paying for some time. If you can now continue paying, but cannot afford to pay the missed payments in bulk, let your lender know. They will create a repayment plan to help you clear the past-due payments without a problem. The main thing the lender will do is to take the total sum of the missed payments and divide them within your proceeding monthly payments. Be honest with the lender and don’t agree to a plan you cannot afford.
- Know Your Options
Another way you can avoid foreclosure is by knowing the options you have. Often, there are two main options that the lender might provide. A loan modification is a change of your current loan terms. Modifying your loan allows you to get an affordable repayment method to remain in your home. The lender can also add past-due payments to your loan balance without increasing your monthly payments. The lender may also extend the time you are expected to complete paying the loan to have more time to pay.
Another option is loan forbearance. Forbearance allows you to put a hold on your payment for a specific period. You are given this period to set your finances straight before going back to the monthly repayments. One thing you should know about forbearance is that you will need to pay the total amount of money you owe before continuing with the session. So, if you owed up to 4 months, you will need to pay a lump sum of the total before you continue.
- Review Your Spending
Organize your loan documents and financial information. This will help you to figure out your income as well as expenses. Once you have figured this out, it is high time to review your spending. Create a budget that will help you to get back on your feet. This means looking at how you spend your money and finding ways of reducing these expenses. Cut out monthly subscriptions or cable TV payments that you don’t use. If you have unsecured debts, delay them a bit to pay your mortgage. Remember, keeping your house is the second priority after healthcare.
The Bottom Line
These are three vital things you should do to prevent foreclosure. Going through financial difficulties is understandable, but you have the role of ensuring you don’t lose your house. One thing you must avoid at this point is signing documents from people who pretend to work on your behalf. Unless it is your trusted lawyer, beware of foreclosure recovery scams.