For homeowners, foreclosure is a dirty word that should be avoided at all costs. But when economic 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 on how.
Apply for the mortgage modification program
Most homeowners get caught up in mortgage payments due to high monthly payments. Through mortgage modification programs, these monthly payments can be significantly reduced 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 Home 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 available to homeowners who have experienced a decline in home values.
Apply for unemployment assistance programs
Sometimes unemployment becomes the main reason why monthly mortgages become unstable. Job loss can happen 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 homeowner should find new employment as the mortgages will reverse to normal rates.
Get in touch and explore options to avoid lender foreclosure
The value of communication should not be lost during foreclosure problems. Lenders also have numerous programs or options to offer to avoid foreclosure. Lenders generally favor these options because foreclosures mean they have to bear more costs. Remember that having a house repossessed on your 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 truly unavoidable, then opt for a managed way out like redemption. This option is available to the homeowner for a certain period after the home is sold through foreclosure. With this, the owner is once again eligible to repurchase the house and return to being its rightful owner. However, this option requires the homeowner to pay the increased outstanding mortgage balance at the time the home was foreclosed.
Foreclosure is a dirty word, but there are a few things you can do to prevent it from happening. The tips above should serve as a guide. For other help, your local real estate agent is always just a phone call away!
