Home ownership has long been considered part of the American dream. For the growing number of people facing foreclosure it has become more of a nightmare. Reports show that foreclosures are up 24 percent in the first quarter of 2009. Homeowners who are struggling to make their mortgage payments fear losing their home as a result of job loss and dwindling savings in the past year. If you are falling behind on your payments or even anticipate trouble keeping your mortgage loan current, you must take action now to avoid foreclosure.
- Accept the reality of your situation. One of the worst yet most common reactions to financial difficulty is denial. Unfortunately when it comes to your home, denial can result in consequences far worse than dodging a few collection calls. You know your financial situation better than anyone else, which makes you the only person in the position to recognize the signs of impending trouble. You may want to “wish” away your problems, but facing them and being proactive in finding a solution is the better strategy.
- Contact your lender…immediately. Again, defaulting on a mortgage is much bigger than missing one or two credit card payments. You must contact your lender at the first sign of trouble to discuss your situation and see what options may be available to you.
- Take a second or third look at your budget. Tough economic times often require tough decisions. If you haven’t already scaled back unnecessary spending, it is time to take a hard look at your expenses. When you are facing the possibility of losing your home, you have to eliminate costs that are not necessary for survival.
- Explore options available. Once you have confronted the issue, contacted your lender and eliminated unnecessary expenses you can focus on finding options that may be available to help you through this tough time. Your lender may be able to reduce your interest rate, lower your monthly payments or suggest a repayment plan that allows you to keep your account current and work through your financial hardship without losing your home.
- Do not jump at the first solution presented to you. Before you accept help from third party companies claiming to help save your home, or committing to re-finance options, carefully research and consider these options. If you receive unsolicited advice or correspondence, know that many con artists are looking for (and finding via public notices) people who are in desperate situations. Remember the age old saying, if it seems too good to be true, it probably is.