Ways of Avoiding Foreclosure
Reading online how to avoid foreclosure is something a lot of American homeowners are doing these days. Since the housing bubble burst and the housing market began to falter, millions of people who thought they would never face foreclosure are now facing the real possibility of losing their homes. Finding good information on the internet about avoiding foreclosures is hard to do, and I would warn readers about trusting just any home mortgage site you find online. If a site is making money off refinancing advice, and therefore your foreclosure problems, then be careful about the foreclosure advice you receive — especially when they give easy shortcuts to avoiding a foreclosure on your home.
With that in mind, let me give you a little common sense advice on foreclosures.
Stay Calm
First of all, don’t panic. Foreclosure is something you don’t want to do, because it will hurt your personal credit for years to come. Having a bad credit rating can hurt you when you try to purchase a new home or try to secure a car loan or business loan. Even worse, it can hurt your chances of getting a much-needed loan in times of emergency, so don’t accept a foreclosure process lightly. But remember, companies are feeling the home mortgage crisis, too, and they generally don’t want to foreclose on a house if they can avoid it.
Don’t Procrastinate
If you get a foreclosure notice, begin to find solutions immediately. Foreclosures take 231 days to complete. The more time you have to find mortgage assistance and discuss options with your debtors, the more options you will have. So if you get a foreclosure notice, don’t ignore it for several months and don’t keep it from your spouse or relevant family members. Start to work to find real solutions to your particular foreclosure problem. There are avenues out there to help you avoid house foreclosure.
Look At the Big Picture
With a new administration coming into office, there are likely to be new government programs coming into effect in 2009. Some of these programs will inevitably help homeowners either refinance their homes or subsidize real estate companies which are “writing down” home mortgages. Either of these laws is designed to help keep Americans in their current houses. Keeping in mind that a foreclosure takes around 8 months to complete, if you’ve just entered into the foreclosure process, then these laws should be in place to help you.
Seek Help and Guidance
Don’t be afraid to seek financial assistance and financial advice. Don’t make this a pride thing, where you’re too proud to ask for help. This is a financial crisis that caught just about everybody by surprise. As an American consumer, it was a good bet that housing prices would continue to go up, because they always had before. That bet went against you, but you can chalk it up to bad luck. So don’t hang your head about what’s happened. Seek people who know the housing business to help you out of your foreclosure situation. Most of these people were wrong before, but they still know more about the housing market than any of the rest of us. All of us, including the housing experts, have more information to go on, and now that we all know the problem, solutions to your housing crisis are beginning to present themselves. If you want to inform your questions about foreclosure, go the HUD website at http://www.hud.gov/foreclosure/ and get a basic understanding of foreclosure. Once you know the right questions, you might begin to get the right answers.
Get Ready To Tighten the Belt
That doesn’t mean that avoiding foreclosure is going to be easy. I won’t lie; retrenching your finances to avoid foreclosure is no kind of fun.
When you’re trying to work your way out of debt, there aren’t always easy answers. You and your family may have to tighten your household budget for a time to get through these economic troubles. Remember that this will be a temporary situation and remain hopeful. Even the experts thought the housing market would continue to grow, so don’t beat yourself up and lose hope in the future. If you tough it out and stay in your house, the markets will turn around. It may take a few years, and that’s scary, but you and your family will come through this tough financial situation, if you learn to budget your household economy and do without some of the less essential consumer services and items you’ve always wanted.
Take Care of Your Business
Meet this challenge head-on. Continue to go to work and make money for your family. Seek other ways in your career or even outside your job to make additional income. Keep good financial records of your mortgage situation and your house budget. If issues come up, address them immediately. Now is the time to take a clear-headed approach towards your family’s home mortgage crisis. To get out of this foreclosure crisis, Americans need leadership on every level — even the family level. You can lead your family out of its foreclosure problems.
Avoid Making Matters Worse
Refinancing your home mortgage can help end your foreclosure crisis. In many ways, though, now is a dangerous time to take on new loans. For one, the credit crunch probably means the long-term interests rates will be higher than you are used to. You don’t want to prolong or compound your foreclosure crisis, so make certain you know what you’re signing before you refinance. I’m not saying you shouldn’t refinance your home mortgage; I’m just saying you do need to do your due diligence. Talk to different experts and financial advisers before signing. Consider what you’re learned in the last year or so about financing houses and figure out if this loan is like the one that got you in trouble in the first place. Make your home mortgage decisions based on logic and experience, not a quick fix.
Relocate as a Last Option
After you have locked down your family budget, met with mortgage experts and sought government remedies, you might find that you have only two choices: relocation or foreclosure. (Sometimes it depends on what mortgage rates are doing at the time.) Avoid foreclosure if at all possible, even if it requires you relocate your family to a more affordable home. Businesses “cut their losses” at times, and families sometimes have to do the same thing. That’s a hard decision to make, because it involves personal and family pride. Leaving your house because you can no longer afford it ruins all the plans you and your spouse had, and it is a blow to your self-image. But if it comes to a decision to leave on your terms or through foreclosure, save your credit rating. Foreclosure means years of a black mark on your credit report, and a bad credit history will limit your family’s options for the future. It’s worth the pain to tough it out and maintain as many options as possible for your financial future.