Avoiding home foreclosure – Practical suggestions to avoid foreclosure

Home foreclosure, once considered a rarity, has become commonplace nowadays. As the Mortgage Brokerage Association statistics point out, the number of home foreclosures has risen sharply from 200,000 to over 600,000 in just under two decades.

While missing your loan payments could be the most obvious reason for a foreclosure, there are a lot of other reasons which play a big role in this process. Divorce, medical expenses due to sudden health related problems, credit card debt, job loss, and death of the only breadwinner of the family are some of the major reasons for home foreclosures.

Having said all this, you cannot rule out the fact that home foreclosures can be avoided. With a little bit of calculation and caution, home foreclosure could be completely taken out of the equation. Given here are some of the dos and don’ts about avoiding home foreclosures.

Make your payments regularly
This is possibly the easiest way to avoid a foreclosure. Preplan your expenses accordingly and make sure you don’t miss a single payment. Even when you miss a couple of payments, your credit undergoes a major setback, which might be a big issue in your loans.

Disclose to your lender
Most people don’t reveal their problems to their lenders and treat their letters as threatening calls. When in trouble, discuss with your lenders and explain the reason for not making the payments. Banks and mortgage lenders always want their money back, not your home. You can also get help from professional foreclosure negotiators who are trained to talk the talk with the lenders and sort out the problems.

Prioritize your obligations
Say you have missed out a few months’ payment and your mortgage company insists you to make the due payment in a single installment. The commonest mistake people do is to pay off credit cards, phone, and other regular obligations and then with what little they have, try and negotiate with the mortgage company. It simply doesn’t work that way. When you have reached the point where your company asks for a bulk payment, make it without a second thought. Remember – mortgage payment should be your first priority as your most valuable property is at stake.

Seek help from your near and dear ones
While it may be embarrassing for you to admit your crunch and ask your friends and relatives for help, it is much better than moving out of your home and the news hitting the papers. The support from friends and relatives not only helps you financially, but also serves as a big morale booster.

Lookout for the options
When it comes to foreclosures, as they say, “It ain’t over until it’s over.” Most people succumb to the pressure of the mortgage companies and think they have no other options. But, there are options available to help you out. You can opt for a special forbearance in which your lender will reduce or defer some of your payments. You can also modify your mortgage and ask your lender for an extension of the loan period. When talked about, most of the lenders would come up with such options to get you back on track.