Foreclosure is something that no one wants to experience, and while there are some circumstances which will make foreclosure unavoidable; most foreclosures are in fact preventable if you know what steps to take to avoid it. If you are experiencing financial difficulties and you believe foreclosure is on the horizon, then now is the time to take a close look at these 4 ways to avoid foreclosure—and implement them ASAP to help ensure you do not find yourself with a foreclosure notice.
1. Address your financial problems as soon as possible
The first thing you need to do is acknowledge that you are experiencing a problem. The more you put this off, the more serious the consequences will be, and the higher the chance that you won’t be able to resolve your problems without going into foreclosure. When you suspect you have financial problems, you will need to lay out all of your finances on the table. What are your expenses? What is your income? What bills and other financial obligations are you behind on? A complete understanding of your financial situation is essential for avoiding foreclosure.
2. Contact your lender immediately when you realize you are behind
As soon as you realize you are behind—or are going to be behind soon—then you need to contact your lender. Do not ignore the problem hoping it will go away. Lenders do not want you to go into foreclosure—they want your payments! So if you contact a lender and explain the situation, you will find that almost all lenders are more than willing to work with you on a financial plan that will help you avoid foreclosure while ensuring that the lender still gets their money.
3. Do not avoid opening mail from your lender
If you have been getting letters from your lender and stacking them up on the counter out of fear that they may bring bad news—stop! You cannot ignore your lender, especially if you are behind on payments. The lender may even be sending you final notices, so if you ignore these letters, you could be confronted with foreclosure and lose out on your best recourse to solve the situation. It may be anxiety-inducing, but you have to confront the problem head on.
4. Prioritize your house spending over luxuries and non-necessities until you get back on track
So, you’ve contacted your lender and laid out your finances—most likely what will happen is that your lender will allow for a custom plan that will help you get back on track with your payments. What you need to do now is twofold: first, think of any assets that you can sell in order to raise more money for your payments. Assets can include anything from vehicles, to clothing, to game systems—anything that can get you money. Secondly, you need to take a long, hard look at your spending and prioritize your housing payments over everything else, with the exception of your medical care. This means that luxuries and non-necessities need to be eliminated or at least, severely reduced.
With the above tips in mind, you can help to prevent foreclosure. Just remember to address the problem as soon as you can to reduce the chances that you’ll have to face foreclosure. Also remember to contact a real estate attorney who may be able to help guide and represent you through the process.