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Foreclosure – How to Avoid This Ugly Word

For homeowners, foreclosure is an ugly word that should be avoided at all costs. But when financial problems come, it is another dilemma that must be faced with courage and wisdom. But do you know what can be avoided? Here are some tips how.

Apply for the Mortgage Modification Program

Most homeowners get stuck in mortgage payments due to the high monthly payment. Through mortgage modification programs, these monthly payments can be significantly reduced by up 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 Housing Affordable 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 that homeowners who have experienced a decline in home values ​​can obtain.

Apply for unemployment assistance programs

Sometimes unemployment becomes the main root why monthly mortgages become unstable. Job loss can occur at any time. With this, there are special programs for homeowners who are suddenly out of a job while still paying their home mortgages. There is a program that allows up to 12 months of reduced or suspended mortgage payments. During those months, the owner should find new employment as the mortgages will revert to normal rates.

Get in touch and look into options to avoid foreclosure from the lender

The value of communication should not be lost during foreclosure issues. Lenders also have numerous programs or options to offer to avoid foreclosure. Lenders generally favor these options because foreclosures mean they have to shoulder more costs. Remember that having a foreclosed home on their stables means they have to pay maintenance fees and taxes until the time the property is purchased from them.

Have a managed output

If foreclosure is really unavoidable, then go for a managed way out like redemption. This option is available to the homeowner for a certain period after the home is sold due to foreclosure. With this, the owner is once again eligible to repurchase the house and become its rightful owner again. However, this option requires the homeowner to pay the increased outstanding balance of the mortgage at the time the home was foreclosed on.

Foreclosure is an ugly word, but a few things can be done to prevent it from happening. The above tips should serve as a guide. For other help, your local real estate agent is always just a phone call away!

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