I Must Avoid Foreclosure to Maintain My Credit!

Do you need to avoid foreclosure in order to maintain your credit? Read on to learn how it’s done.

The foreclosure rate in the U.S. has actually gone down pretty dramatically over the course of the last 10 years.

But there are still millions of Americans who fear facing foreclosure every year. Studies have shown that about 1 out of every 200 U.S. homes will be foreclosed on at some point in time.

If you suspect that foreclosure might be an issue for you and your family sometime soon, you should do whatever you can to avoid foreclosure. Rather than waiting until it’s too late, spring into action immediately and take steps to prevent foreclosure from affecting you.

When you avoid foreclosure, you’ll get to maintain your credit score and steer clear of the consequences that come along with having bad credit. Check out some of the ways you can avoid foreclosure below.

Resist the Urge to Ignore the Problem

If you’ve reached the point where foreclosure is a possibility, there’s a good chance that you’re likely frustrated beyond belief. You might even be so fed up with the way things have played out that you choose to ignore the problem at hand.

Do not do this! Ignoring your problem isn’t going to make it go away, and it’s likely going to lead to your mortgage lender foreclosing on your home.

It’s not easy to face foreclosure head-on. But it must be done if you’re going to avoid it and salvage what’s left of your credit score.

Sit down and read through all of the various letters your mortgage lender has sent your way with regards to your missed housing payments. Crunch the numbers to see just how bad of shape you’re in so that you know what steps to take next.

Touch Base With Your Mortgage Lender as Soon as Possible

In a perfect world, you should reach out to your mortgage lender the moment you know that you’re going to fall behind on a single mortgage payment. This will give you and your lender the opportunity to come up with a plan moving forward.

Most mortgage companies are willing to work with homeowners to help them avoid foreclosure. But it’s often difficult for them to lend a hand when homeowners wait until they’ve fallen too far behind to catch up on their payments.

When you touch base with your mortgage lender sooner than later, you’ll give yourself so many more options as far as catching up on missed payments. But even if you wait longer than you should, your mortgage lender will still typically be open to the idea of figuring out a repayment plan so you can steer clear of foreclosure.

Read Through Your Mortgage Documents to Learn Your Rights

Remember all those loan documents you signed when you first purchased your home?

Whether you read them at that time or not, now would be the perfect time to review them to see what they have to say about foreclosure. The documents should outline your rights and let you know how long you can expect a lender to wait until foreclosing on your home due to missed payments.

The foreclosure laws vary from state to state, so it’s a good idea for you to learn about the laws pertaining to your specific state.

Rework Your Budget and Prioritize Paying Your Mortgage

If you’re able to work out a repayment plan with your lender so that you can avoid foreclosure, do everything in your power to stick to that plan.

Start by reworking your household budget so that you can prioritize paying your mortgage. That might mean canceling things like your cable, your internet, and all the different subscriptions that you have for movies and music.

Outside of your health, there shouldn’t be anything more important than paying back what you owe on your mortgage when you agree to a repayment plan of any kind. You should scrape together as much extra money as you can to get back onto good terms with your lender.

Consider Selling Assets to Catch Up on Mortgage Payments

In addition to reworking your household budget to pay back what you owe on your home to your lender, you should also think about selling any assets you might have.

Do you have more than one car? If so, selling your second car is a good way to free up a bunch of cash that could be put towards your mortgage.

Do you have jewelry that could be worth some money? It’s another thing you should consider selling so that you can catch up on your mortgage payments.

You might be surprised by how much cash you could get your hands on by selling things that you own. It might take a little bit of hustle on your part, but you can get the money you need within just a few weeks.

Sell Your Home Quickly as a Last Resort

If you’ve exhausted all your options and there’s just no other way for you to avoid foreclosure, there is one last thing you can try. You can sell your home quickly to a cash buyer and prevent foreclosure from affecting you and your credit score.

Even if your home isn’t in the best condition, you can find someone willing to buy it in exchange for cash. And in many cases, you can get that cash in a matter of just a week or two.

You can also go the traditional route and list your home for sale if you have time to do it. But in most instances, those facing foreclosure need a quick sale, which is where cash buyers can help.

Avoid Foreclosure and Keep Your Credit Score High

Foreclosure can really wreak havoc on your credit score if you let it. You’ll have trouble qualifying for loans and mortgages for a long, long time if you have a foreclosure on your credit report.

Instead of allowing a lender to foreclose on your home, find a way to avoid foreclosure at all costs. Whether you have to sell just about everything you own or sell your home and use the proceeds to pay down your debt, it’ll be well worth it in the end.

Contact us today to see what we can do to help you avoid foreclosure and maintain your credit.