If you have fallen behind on your house payments, you’re at risk of foreclosure. The thought of losing your home can be quite scary to imagine. You not only have to move out of your house, but your credit score may be damaged for a while. However, you can take certain steps to prevent foreclosure from occurring.
Don’t Pretend Like the Problem Doesn’t Exist
When some people face an uncomfortable situation, such as not being able to pay their mortgage, they may try to ignore the problem and hope that it goes away. However, pretending that this kind of problem doesn’t exist will only make matters worse. If you neglect to address your late payments in a timely manner, you will be at greater risk of losing your home.
Educate Yourself About Your Rights
If you’re at risk of foreclosure, read your mortgage and promissory note to understand your rights. Laws vary state to state. These documents will contain critical information, like whether you can reinstate your loan by paying back your past-due amounts and when the lender can begin the foreclosure process.
Contact Your Lender
Once you miss a mortgage payment, you can expect your lender to send you a notice in the mail. The notice may include important information, such as how long you have to make a payment and foreclosure prevention options. While it may make you feel a little uncomfortable at first, it’s important to contact your lender as soon as you can’t. They don’t actually want your house and may be willing to work with you.
For example, your lender may give you the option modifying your loan or entering into a forbearance agreement.
Utilize Your Other Assets
If you have other assets, now may be the time to use them. For example, you may be able to sell a second vehicle or jewelry to reinstate your loan. These assets might not make a significant dent in your mortgage debt, but they can show your lender that you’re making a true effort to keep your home.
Cut Your Spending
If you’re in danger of losing your home, it’s wise to take a closer look at what you’re spending your money on. If you don’t absolutely need it, you should eliminate it. Unnecessary expenses may include streaming services, going out to eat and gym memberships. Although cutting these expenses may seem difficult initially, you’ll feel relieved once you catch up on our mortgage payments.