Each year, thousands of homeowners lose their houses to foreclosure. While in some instances homeowners have no choice but to let the home go, there are times when taking timely foreclosure preventive measures can save your property from been foreclosed. In case you are facing a financial crisis, and it happens that your bank has sent you a foreclosure notice, here are some tips on how to avoid foreclosure.
Get Help From The Government
The increased foreclosure figures have attracted the attention of the government. The government has initiated several programs to help homeowners facing the foreclosure menace to recuperate. The home affordable modification program is designed to help homeowners facing foreclosure to get better loan terms and reduced monthly payments. The home affordable refinance program enables you to get a lower loan interest fixed rate mortgage repayment.
Negotiate With Your Mortgage Provider
Soon after you realize that you are unable to pay your next mortgage installment, you should contact your lender to ask for an extension of payment time or reduction of loan repayment. Banking institutions realize the effect foreclosures have on their sales and profits. Unless they are forced to do, no bank would want to foreclose your property before giving you alternatives on how to avoid the foreclosure.
File For Bankruptcy
When you have unsuccessfully tried each of the above tricks, you may need to file for bankruptcy. Filing for bankruptcy leads to an automatic termination of the foreclosure process. Your mortgage lender cannot reopen this process unless they are given the go-ahead by the court or your case is closed. The greatest thing with filing for bankruptcy is that it allows you time to improve your worsened financial situation.
Sell Your House
If you lose your job and you dont have any other reliable source of income, the best way to avoid foreclosure is to sell your house. While you may want to try the other foreclosure prevention measures hoping to retain your house, they will rarely offer any solution to your problems if you cannot afford to refinance your home. However, before you place your house on sale, you need to alert your lender.
If your lender is pleased by your proposal, they will give you the go ahead to sell your home as well as allow you stay in the house without making the monthly payments. Before you opt for this method of foreclosure prevention, you should remember that not all banks will grant you the go ahead to sell your house and even if they do, finding customers for the house would not be an easy task.
Find out theshort-sale pros and cons.