Foreclosure is a financial nightmare that many people are facing today. The economy, poor planning, job loss, divorce, and a host of other reasons have contributed to the rising foreclosure market. If you find yourself dealing with the possibility of a foreclosure, there is help out there. In this article you will find five things to do to prevent the foreclosure process before it gets started.
1. Accrue Savings for a "Rainy Day"
Many wants and needs face us each day and it’s time to face the reality that a "rainy day" is going to come in your finances. Your grandma has always told you to save for an emergency and it’s time to start taking her advice. A good emergency fund would be equivalent to 3-6 months of your expenses. When you have that emergency fund in place, you can no doubt tap into it to make your payments and stop a foreclosure.
2. Have a Home Equity Line in Place
If you’re put in a position where you need to stop a foreclosure fast, you will need money quickly and many resources might be dried up by then. A home equity line of credit can be set up with little to no cost and can be locked in at rates as low as 4%. In most cases you will not even have to pay anything monthly and the money will already be there when you really need it. No need to fill out any applications, you will have already done that and all you will have to do is write yourself a check.
3. Don’t Skip Your Mortgage Payments
This may seem like a "no-brainer" but every foreclosure finds its roots in this problem. Once you have missed a mortgage payment you have started down a rocky road that will be hard to travel back up. Skipping a mortgage payment is far more serious than missing a utility bill or credit card so consider ignoring a different bill before letting a mortgage payment go unpaid.
4. Discover Your Options and Take Advantage of Them
You may have been led to believe that you have no options, that you must pay in full or loose your home to foreclosure. There are options like getting what you owe on your property reduced or spreading your missed payment over the next six months of payments. The sooner you act the more options you have.
5. Ask for Help
When it comes to stopping a foreclosure your pride is going to have to take a back seat and you are going to need to ask for help. It may be a little embarrassing, but when it comes to loosing your home you will have to put that embarrassment aside and ask for help. Most people you care about will be more understanding than you think and give you the help and encouragement you need for this season of your life. These are just a few of the many tips out there to prevent foreclosure, so take advantage of them and good luck.
