You and your spouse have saved for years to buy a home. Finally, the day has come and the mover is busy in his job placing furniture in the new house along with all the boxes. Your dream is to decorate the inside like so many of the pictures in the home décor magazines. His dream is to have a perfect lawn and a patio where he can impress ith his BBQ skills. Besides the upkeep, buying a home is not without its special challenges. Fall behind in mortgage payments, by 30, 60, or 90 days and you are in default. Here are 6 tips to avoid losing the house to foreclosure.
What could those homeowners have done to avoid losing the house to foreclosure? Right now according to Zillow, there are almost 350 houses in Hammond, Indiana in some form of foreclosure.
Foreclosure doesn’t just suddenly appear like a box of kittens on your doorstep. Like blizzards, there are signs of approaching trouble, including:
- having difficulty paying the mortgage payment on time
- having very little savings for emergencies
- using credit cards to get to the next payday
- paying the minimum on your credit cards
- neglecting doctor and dental visits
- shrinking from the ring of the phone
- change in employment or change in debt to income ratio
If you see your family described in that list, you may be facing possible foreclosure. You can avoid losing the house to foreclosure.
Here are three tips to avoid foreclosure:
Contact your lender
And level with them. They may be nervous by the extent of your problem, but they have seen this before and will demand you take steps to fix it. That may require you selling your toys and making major cuts in your spending.
Don’t ignore your mail
Many have been in your shoes. The first thing many did when the mail came was to throw the bills in a drawer. Those first envelopes will contain helpful suggestions to get things under control. Then will come legal action. Ignoring those notices can cause you to lose everything.
Know the Process of Foreclosure
If you miss a few mortgage payments In Indiana, you will receive 30 days’ notice before the lender files a foreclosure complaint. The borrower gets 20 days to respond to the complaint. After the complaint is filed, the house can’t be sold by the lender for three months. In most cases (longer for certain older mortgages). Most foreclosures are judicial, which means the lender (the plaintiff) must file a lawsuit in state court. Here you have another opportunity to avoid default by responding to the court. If you file an answer, the lender cannot obtain a default judgment. Instead, the lender will either: seek a summary judgment or go to trial.
Here are three more tips to avoid losing the house to foreclosure:
Your banker does not want to own your house. When you come clean about your financial situation, he may be able to modify the loan, offer forbearance or give you repayment options.
(A) The loan modification could include a reduction of the interest rate, convert from a variable interest rate to a fixed interest rate, or extend the length of the term of the loan. A loan modification agreement is a permanent solution to unaffordable monthly payments.
(B) A forbearance agreement provides short-term relief for borrowers. With a forbearance agreement, the lender agrees to reduce or suspend mortgage payments for a certain period of time and not to initiate a foreclosure during the forbearance period.
(C) Repayment options could include a plan to repay missed payments in addition to making monthly payments, especially if there is a temporary hardship.
Contact a bankruptcy attorney
That sounds contrary to taking responsibility, but you need to know your options so you can make informed decisions.
Contact a professional real estate investor
You may want to sell your home fast to get out of the problem or to save your credit rating. Max Properties is here to help homeowners out of any kind of distressed situation. As investors, we can help homeowners out of just about any situation, no matter what! There are no fees, up-front costs, commissions, or anything else. Just the simple honest truth about your home and how we can help you sell it fast to resolve any situation.
In summary, recognize approaching trouble, contact your lender, and seek professional help.