If you’re behind on your mortgage payments, scary thoughts may be swirling about in your head.
But don’t let the fear overtake you.
Avoiding foreclosure requires that you be proactive and take measured steps at the first sign of financial hardship. The longer you wait, the harder the battle becomes, and the more stressed out you get.
If you’re wondering how to avoid foreclosure, there are things you can do. And to make things easy on you, we’ve detailed each of the three options below.
First Step: Get Clear on Your Financials
The first step is to take a good, honest look at how much you make versus how much you spend.
Do you have any expenditures greater than your income? Are there any non-critical things you spend money on you can cut out?
If you can meet all critical expenses (including mortgage) after cutting out unnecessary spending, you’re in good shape, and can proceed to strategy A below.
If your income is still not sufficient to cover major bills after cutting out all non-critical expenditures, more drastic actions are necessary. But don’t panic, just mosey on down to strategy B and we’ll help you get it sorted out.
You’ve modified your financial behavior and can manage critical expenses such as your mortgage, so now you’ll want to call your loan holding institution.
Ask how much extra money you’ll have to pay to cover late payments. And make sure you’re clear on when the payments need to be made.
Next, adjust your payments accordingly and make them diligently until you’re caught up.
If you’ve modified your financial behavior and still can’t make the mortgage payments, you’ll need to try to negotiate with your financial institution.
If you’ve contacted them early enough, they’ll more than likely be willing to work with you. Foreclosure isn’t in their best interest either.
If they are willing to offer you some wiggle room, they’ll modify your loan and lower your monthly payment so you can afford to pay your mortgage. This is a certainly the ideal scenario.
There is, however a less fortuitous possible outcome: they may refuse to modify your loan and threaten you with foreclosure.
Alright, so that’s not the best situation to be in, but you can salvage your financial future…
If you sell your house quickly, the foreclosure process won’t wipe away your equity.
A reputable real estate investor can purchase your house with cash quickly before the foreclosure process goes to auction.
While you won’t be able to keep your house, you will receive a lump sum payment, and your credit score will be preserved, which will make buying another home, once your financial situation improves, possible.
We hope you won’t end up having to go through foreclosure, but it you do, remember to stay calm and be proactive. It’s the perfect recipe for keeping you out of financial harm.
Have more questions about avoiding foreclosure? We’re happy to help. Just call us at 206-231-5864 or fill out the form below.