For homeowners, foreclosure is a nasty word that should be avoided at all costs. But when financial problems arise, it is another dilemma that must be faced with courage and wisdom. But do you know what can be avoided? Here are some tips on how to do it.
Apply for the mortgage modification program
Most homeowners get caught up in mortgage payments due to the high monthly payment. Through mortgage modification programs, these monthly payments can be significantly reduced to $ 1,000 or more, giving the loan a more stable structure.
The government designed several mortgage modifications to help homeowners avoid foreclosure. One program is called the Affordable Home Modification Program (HAMP). This program reduces monthly mortgage payments by up to 31% of homeowners’ gross monthly income before taxes.
There are also underwater mortgage programs available to homeowners who experienced a decline in home values.
Apply for Unemployment Assistance Programs
Sometimes unemployment becomes the main root of monthly mortgage instability. Job loss can happen at any time. With this, there are special programs for homeowners who are suddenly unemployed while still paying their mortgages. There is a program that allows up to 12 months of reduced mortgage payments or suspension. During those months, the owner must find a new job as the mortgages will be reversed at normal rates.
Contact the Lender and Find Options to Avoid Foreclosure
The value of communication should not be discounted during foreclosure problems. Lenders also have numerous programs or options to offer to prevent foreclosure. Lenders generally favor these options because foreclosures mean they have to bear more costs. Remember that having a foreclosed home in your stable means you have to pay maintenance fees and taxes until the time the property is purchased from you.
Have a managed departure arranged
If foreclosure is truly unavoidable, opt for a managed exit as the ransom. This option is available to the homeowner for a certain period after the home is sold in a foreclosure sale. With this, the owner can buy the house again and be its rightful owner again. However, this option requires the homeowner to pay the outstanding mortgage balance that was increased at the time the home was placed in foreclosure.
Foreclosure is a nasty word, but you can do a few things to prevent it from happening. The tips above should serve as a guide. For more help, your local real estate agent is always a phone call away.
