If you're struggling to stay in your home and a foreclosure process is inevitable, there are ways to save your home. Obviously one of the best ways to avoid foreclosure is to nip any financial problems in the bud immediately. This means notifying your lender at the first sign of trouble.
Believe it or not, your lender does not want your house. It's in your lender's best interest for you to stay where you are and try to work it out than have you on the streets. Most lenders will work with homeowners to arrive at an adjusted payment schedule or find a new program that works better than the current one. Also, knowing your homeowner's rights is important so you know what your lender can and cannot do should you come face to face with foreclosure.
Read All Correspondence from Your Lender
During the initial foreclosure phase, your lender will provide you with a bevy of information about ways to avoid foreclosure. Correspond with your lender during this initial time period to avoid a foreclosure disaster. Subsequent letters and correspondence from your lender will probably be warnings of pending legal action--not opening or responding will not stand up in foreclosure court.
Understand Your Rights and Where to Get Help
Your mortgage loan documentation should contain information about what steps will be taken should you miss or stop making payments. Also, contact the State Government Housing Office for specific foreclosure information as it pertains to your state. Borrowers can also obtain free financial counseling assistance through the U.S. Department of Housing and Urban Development (HUD). HUD counselors can assist borrowers with making informed decisions about ways to re-organize finances, laws and may provide representation during negotiations with your lender.
Re-Organize Your Budget
You may not need a HUD counselor to tell you that you may be spending too much money on food and entertainment instead of putting cash toward your mortgage payment. Housing typically takes up the largest chunk of most American's budget, followed by transportation, healthcare, insurance and groceries. Sometimes re-prioritizing funds to reflect "needs" instead of "wants" may help you stay in your home.
In addition to a long, hard budget review, examine areas of your lifestyle that you no longer need. If you spend some of your monthly budget on having a cleaning service or lawn care, consider reducing or eliminating those services. You could also take on a second job or sell an extra vehicle or whole life insurance policy to avoid foreclosure.
Be Wary of Foreclosure Scam Artists
Unfortunately scam artists know you are looking for help and will prey on this vulnerability. Avoid any company interested in collecting fees for foreclosure assistance and never sign a legal document regarding your mortgage before reading and understanding it completely.
Although foreclosure may seem to be eminent, you can still avoid losing your home by taking a just few steps in an effort to save it.
Gina Ragusa is a freelance writer and mom from sunny (and sometimes not) South Florida. Her 15 year experience ranges from writing about banking to tattoo parlors. Read more about her adventures at http://blog.wahm.com/