It doesn’t matter who you are: the threat of losing your home can be a major stressor for you and your family.
The possibility of foreclosure can make anyone desperate. But the key to prevent foreclosure is to make sound decisions, do your research, and explore every option that’s available to help you keep your home.
In this article, we’ll look at how you can prevent home foreclosure and avoid having your credit destroyed.
Know Your Rights
Even if you might be losing a house, you still have rights. In fact, the documents that explain your rights in the event that you can’t pay for your home should be somewhere in your home. Your original mortgage papers should list the information
Be sure also to know your rights in the state you live in. Each state has different laws, and you might be able to fight back or buy yourself more time by simply pointing out what’s legal in your jurisdiction and what isn’t.
Get on a Tight Budget
It’s a tough pill to swallow, but really the only way to prevent foreclosure is to pay your way out. How you go about doing that and the way each situation will play out is unique—but ultimately the road runs through you giving away money.
In times of crisis (which the thought of having to sell your home falls firmly under), it’s easy to get it in your head that you can’t make possibly enough money to save it.
But your income is only one-half of your financial picture. You might be limited in terms of what you can bring in, but you can easily adjust what you’re putting out.
Cut expenses starting today. If you’re ruthless about it, you can easily add a few hundred to a thousand dollars back into your pocket—even if you were frugal, to begin with.
Look Into COVID-19 Relief Options
Obviously, it depends on when you’re trying to prevent foreclosure. But even in 2021 and beyond, there are some new laws and relief options that have been passed related to the Coronavirus pandemic.
In fact, there are several mortgage relief options being offered specifically introduced through the Stimulus packages. See if they apply to you and get your application in as soon as possible.
Down the road, there may still be relief options available. Keep up with current trends in home buying and do your research.
Request Mortgage Forbearance
Some banks and lenders will consider forbearance before they foreclose if you have a good borrowing history. In forbearance, you get to temporarily stop making payments without it affecting your credit score or standing with the lender.
Ultimately, this won’t work in every situation. If you have no money coming in, it could be dangerous to agree to back-pay several mortgage payments all at once down the road. But it also might be your only option to keep the family in your home.
Do your research and read the fine print finely before signing any forbearance documents.
Refinance Your Mortgage
Remember that avoiding foreclosure is the goal of the lender, too. It’s much easier for them to not have to take your home and sell it. In some cases, they may be willing to work with you.
Refinancing your home could be a way to prevent foreclosure as well.
More often than not, this situation calls for refinancing that spreads payments out over more years. This lowers your monthly mortgage but adds more to the balance owed on your home.
You may also qualify for a lower interest rate if your credit score is okay. Shop around and see if you can find a bank willing to lend you the money.
Investigate Property Taxes
In certain states, property taxes are incredibly expensive. But they can also vary widely based on the condition of the home or the current market. So it’s worth looking into your current property tax amount and seeing if it can be adjusted.
This is one way you could potentially add cashback to your pocket to pay the bank. It also shows the banks you’re doing all you can to make this work, which could buy you a little more time.
Give Yourself Time to Make Decisions
The threat of losing a house is stressful. But this is not a time to panic. In fact, it’s time to consider every decision you make very carefully.
It’s so important to avoid impulsive decisions or signing your life away because you’re emotional. It’s also important to consider who is giving you advice—bankers and third-parties are biased (and worse, sometimes trying to scam you). It helps to talk to an expert on the matter.
In certain cases, it may be the right move to let the foreclosure happen. At the very least, you can get on with your life and not handcuff yourself to a bleak financial outlook for the next 30 years.
Be smart, take your time, and make a decision that works for your future.
How to Prevent Foreclosure
The keys to prevent foreclosure really comes down to doing research and preparing thoroughly. Explore all your options and understand how you might be able to stay in the house through deferment, forbearance, COVID relief options, or refinancing.
Setting a budget is also important. The sooner the better, because at some point you’re going to need access to cash if you’re going to stay in the home.
If you exhaust all these options, it might be worth exploring how much you could sell the home for today.
Contact us today to get a fair quote for a cash payment on your home.