If you’re behind on your house payments, you may be in danger of foreclosure. But there are some things you need to know before you give up hope.
Your Lender’s Perspective
You need to know that the bank really doesn’t want your house. With so many houses in the real estate market today and house values falling every month, your lender really doesn’t want the hassle and financial loss that comes with taking over your house. It actually costs them even more money in auctions and upkeep when they foreclose on a house. It is in their interest to work with you to reach an agreement that you can work with to get your payments under control and help you stay in your home.
Talk to Your Lender
Did you know that more often than not, homeowners never talk to their lender before a house is foreclosed on? Mail goes unanswered and telephone calls are avoided. In short, these homeowners aren’t taking advantage of the lender reaching out to them and attempting to find a way to resolve the problem.
If you are in the situation of being behind on your payments, talk to your lender. Open your mail and call the contact person in their letters to you. Be honest and lay out your financial situation to your lender. If you have recently lost your job, ask if there is anything that can be done to delay or offset your payments until your income recovers.
Know Your Finances
Sit down and list all of your expenses and your income. Make sure you include credit card payments and utilities. Include budgeting for food and gas. Know exactly how much money you have available for your expenses.
When you call your lender, have this list in front of you. It is important that you be able to answer their questions with some accuracy and honesty.
Can You Really Afford Your House
Have an honest discussion with yourself and your spouse about what you can really afford. In some cases, it is financially smarter to let go of your house and rent for a while until you can get back on your feet financially.
If you decide to relocate to an apartment, know that you will need to provide a credit report and a deposit before you are approved. Many apartment management companies are aware that families are shifting from homes they cannot afford to apartments and are willing to work with you.
If You Get Foreclosed On
If you find yourself having a foreclosure happen, be aware that it will be three to four months before you will be required to leave your house. You will be given notification by mail of the final date you will be allowed to stay in your house. Be prepared to move out before that date, otherwise you will be faced with being evicted from your home with little to no leeway to remove your belongings.
Foreclosure is a difficult process to face, but knowing that lenders are willing to work with you to avoid the process can help you retain ownership of your home. Make an honest evaluation of your finances and decide whether you can really afford to stay in your home, and be willing to adjust if you really can’t afford the expense of owning your own home.