For many people, the prospect of buying a home is an exciting one. It signals the start of a new chapter of your life, and the potential for family and personal growth. However, it’s also a significant financial investment, and the unfortunate reality is that some homeowners aren’t ready for such a commitment. When your bills start to outpace your paychecks and your mortgage becomes a looming threat, you might be faced with the prospect of foreclosure. But there are ways you can avoid foreclosure. Sell House For Cash is here with a few strategies you can employ as you work to avoid foreclosure.
Connect With Your Lender
While you may not feel this way at first, your lender is actually here to help you as much as they can. Foreclosure is a financial strain for you and the lending institution, so it’s in their best interest to keep you in your home. The minute you realize that you’re going to struggle to make payments, you should reach out to your lender. They can set up a program to help you repay your mortgage, or connect you with resources that will be of aid.
If you’re already missing payments, make sure you’re not ignoring the letters that your lending institution is sending you. This can only aggravate the problem for both parties, making foreclosure more likely.
Reevaluate Your Spending
A few dollars here and there for lunch every week or coffee every morning may not seem like a lot at first, but these costs can quickly add up. In some cases, individuals who are facing foreclosure have mismanaged their resources by not checking their spending. Build a budget that makes your mortgage payment the priority every month. Take a hard look at things that might seem like something you need, but in reality are luxuries. You can forgo cable television or a new pair of shoes every month if it means you can continue to make mortgage payments on time. Look for ways you can save money in the long-term by investing in eco-friendly appliances and fixtures. While they might cost more up front, they can help you save money on your utility bills every month.
Look Into A Loan Modification
When you discuss your financial fears with your mortgage lender, ask about a loan modification. These modifications can help to lessen your financial strain and are a permanent change to your mortgage. For fixed-rate loans, the modification might be to extend the amount of time you have to pay off the loan. In other cases, the interest rate on the loan might be lowered to help limit the costs associated with your monthly payments.
You May Be Able To Refinance Your Mortgage
Refinancing your mortgage is another option to help avoid foreclosure. Refinancing is the process of replacing your existing mortgage with a brand new one. Often times, these new mortgages have extended terms, reduced interest rates, or in some cases, maybe a different kind of loan. It’s suggested that you only refinance if the interest rates available to you are at least one half of a percent lower than your existing interest rates. Refinancing means that you’ll have to go through the loan application process again, but this is often a faster process than the first time you applied for a mortgage.
Selling your house for cash is one of the fastest ways to avoid foreclosure. If in spite of the strategies above, you’re still facing foreclosure, you can discuss selling the home with your lending institution before the foreclosure process starts. Oftentimes, the lender will allow you to do this, as they would lose more money if the home went into foreclosure. Through a short sale, you list the home at market value and use the cash you earn to pay off the mortgage. In many cases, even if that cash sum is not the same as the remainder of the mortgage, the lender will take it and consider the mortgage repaid.
Trying to avoid foreclosure and need a fast solution? Sell House For Cash is here to help. We make fair, all cash offers on houses in any condition. Using our simple four-step process, we can quickly offer you the cash you need when you need it most. Contact us today to get started.