It's not unusual to have debt, and it's not always a bad thing. Problems arise when repaying debt becomes an issue. Unexpected life circumstances can suddenly make debt repayments, such as those for a mortgage, difficult. If you are having this type of difficulty it's important that you avoid foreclosure.
Taking steps to avoid foreclosure action means that you can hold on to your home. So, what should you do if you have problems paying your mortgage in order to avoid foreclosure? Here are five ways that you can deal with the situation.
Act to avoid foreclosure before it becomes an issue
The good news is that the legal process of foreclosure does not begin until there been no mortgage payments for 120 days. This means that you have time to take action in order to stop the process from starting in the first place. Never delay taking action and just hope that the problems will go away. This will not happen and you could end up losing your home.
Speak to your lender about the problems you are having
The main aim of the lender is to make sure that they get their money back. They want to make the process as easy as possible. This is why you should always speak to your lender as soon as you start to have problems making mortgage payments.
It's best if you can do this before you miss any payments. However, even if you have missed a payment it's still a good idea to contact the lender and talk through the problem. They may be able to provide you with options that can help you to continue with your payments and keep your home.
Know what options are available to you
One of the best ways to avoid foreclosure is to be educated about what options you have available to you. Read your mortgage agreement and make sure that you know where you stand. You can also access free assistance by contacting the US Department of Housing and Urban Development (HUD). They can provide you with the valuable advice that you need. Especially with a global pandemic and many individuals getting hit hard financially, you may have access to more options than you realize.
Prioritize the money that you spend
Once you are in a situation where you have problems paying your mortgage, you need to make catching up on payments a priority. This means that you need to prioritize your spending.
If you are having trouble managing your finances it helps to get some expert advice. There are many finance blogs that provide free information as a good starting point. Generally speaking, you should look for items or services that you can do without such as cable TV or even internet. It's also worth remembering that payment for secured debt, such as a mortgage, should take priority over payment for an unsecured debt, such as a credit card.
Use money from assets to help make payments
If you have assets that are worth a significant amount of money, such as a second car that you don't really need, you may be able to sell them to raise money for your mortgage payments. There are different schools of thought when it comes to selling assets to pay off debt. However, if you are in a situation where you need to avoid foreclosure it's certainly worth doing.
You may also want to think about finding other ways to raise extra cash, such as securing a further form of income. In today’s world, almost anything can turn into a side gig to help bring in more cash. Other options include starting an investment (check out this Roofstock review to get started in real estate investing). At the very least this will show the lender that you are serious about wanting to repay your debt.
If you are struggling to keep up with your mortgage payments put this advice into action as soon as you can. Doing so can help you avoid foreclosure, having to prepare your home for selling and make sure that you remain in your home.
