Foreclosures can be the most devastating event that can happen to a person who owns a house of his dreams. Some are able to manage their debts and dues to make prompt repayment, whereas there are few people who are unable to manage their finances and end up with foreclosure.
What is foreclose and how does it impact the mortgagor?
Foreclose is a legal process followed by the lender who is authoritative to take possession over the mortgaged property when the mortgagor fails to repay his debts. The lender forces the borrower to sell the house in order to recover the balance liability from the borrower.
The borrower who is the owner of the house is suppressed to a circumstance where he is forced to dispose the property urgently in order to repay his balance debts to the bank or the financier. The mortgagor is authoritative to take control over the property as it is been used as the collateral for the mortgage.
Foreclosures are difficult and can lead to depression and anxiety, the borrower needs to take preventive measures and plan his finances in order to preserve his property from foreclosures and to maintain a better repayment schedule.
So here we have a few tips that can help the mortgagor to avoid foreclosure and to successfully repay their dues.
- Plan your finances
So when you plan to take the mortgage for your house, you need to understand that there would be a crunch in the current financial situation as you would need to make monthly repayments. It is better to plan on you financial and set apart the money for the repayment. Change your financial commitments and behavior to prevent unwanted expenses and problems.
- Limit your expenditure
When your expenditure is more, you may end up spending all the money and may not be left with anything to repay the mortgage. It is highly important that you bring down and limit all your expenses as to manage your fund in a better way. When you do so, you would be left with enough funds to make the repayments. It is better to set goals on your every day expenses, commitments and behavior and to work towards it.
- Increase your cash income
It would be better off if you plan to increase your cash flow. You may work additional hours to earn extra so that it can be easy to spend for your requirements and to save some for the repayments. You can also start with a new job to earn more for a smooth financial situation without compromising on your expenses.
- Contact the lender often and get to know your mortgage status
Maintain a close contact with the lender and understand their plans on your mortgage when you fail to make the repayment. Being ignorant without knowing any information can bring you sudden fear and anxiety when you get to know on the foreclosure. Frequent contact with the lender can save you with some time to work out on your plans. You can also request the lender for any modifications on the loans if they choose to help you.
- Seek financial advice form a financial expert or counselor
Contact a housing counsellor you known or someone from the Housing and Urban development (HUD) to get free housing counseling or advice to organize your financial conditions. A financial expert can help you with ways to manage your funds and budget. The housing counselor would advice you on the flexibility you may get as a borrower.
- Look for new financier to take over the existing mortgage.
When you face difficulty to repay and still want to save your house from foreclosure, start looking for any other financier who can lend you money on a lesser interest rate to repay and close the mortgage. However in this situation, you need to understand that you still need to repay to the new lender. So plan on the repayment and if you still find it difficult, look out for other option to sell the house.
7. Do a complete study about the mortgage process
We often sign documents without doing a complete study on the process and end up becoming losing the house. It is highly important to know the complete information, process, terms and conditions and every other detail that pertains to the mortgage. It is never too late, you can still take out your mortgage papers a do a thorough read through to know every I formation pertaining to it.
8. Do not ignore the problem or the lenders call or emails.
You can contact your lender to ask for options to help you on the mortgage, they can offer you with information and advice or can even give you a recovery time to plan and repay your loan. Never ignore the problem as it can worsen the situation and you could lose your house. When the lender tries to contact your through phone calls, emails or in person, feel free to talk to them and to understand better ways possible rather than being ignorant and losing the house. You may even get letters from lender with information that can save you from a foreclosure.
9. Study about the law on mortgages and understand your mortgage rights.
It is important to know your rights on your house and to understand the mortgage laws and foreclosure time frames that is legally practiced in your state. You can co tact the government housing office and speak to something to understand the legal proceedings of a mortgage. Understand the benefits and leverages offered to you as a borrower.
10. Put your house up for sale
When you know that you cannot repay the mortgage, do not wait for the lender to take actions on foreclosure. You can start finding a buyer to sell your house at a better price than to wait for the foreclosure and lose all the money. Create a visibility in your neighborhood that you want to sell the house, this can also bring you buyers to sell the house faster. Or you can contact a company like Moveonhousebuyers if you plan to sell your house fast, companies like this can help you sell your house in less than 7 days.
The above 10 tips can help you to understand and plan of your entire mortgage and the repayment. It is highly important that you are aware of the law, policies and your financial stability before you plan on a mortgage. Set goals and work towards that to be a safe mortgagors and to Avalon in foreclosures in future.