Avoiding Foreclosure

Times are tough, and for a lot of folks, it seems there is no end in sight. When the waters get stormy, we try to hold on to as much as possible—ourselves, our family, our peace of mind. For some people, the thing we seek to hold onto the most—and what seems to be one of the most difficult to keep—is our own home. If you are worried about losing your home, here are five useful tips that may help you avoid foreclosure. First, take a good look at your spending. Work to find out where every dollar is going, from the grocery bill, to student loans, to coffee with friends; look to see just how far the paper trail spreads and total everything up. You may find there are a few hundred dollars going places that you could sacrifice, and go without. This can do wonders in addressing your mortgage. Second, reach out to a lender. When you work the numbers and realize there is no cash that could be redirected at your loan, work with your loan provider to see if there are any options to refinance. The government’s Making Homes Affordable plan might not be program you qualify for, but is certainly worth the effort of looking into, and could save you hundreds, possibly even your house. A third tip is to research your loan. Track down the paper work that came with your original loan. Things to look for in your paper work include if your loan is federally backed, or if your loan is based on principal or on interest. The Fannie Mae and Freddy Mac websites allow you to search your address on their sites to see if one of them owns your mortgage. There is a chance you will find you were approved for a loan even though your income did not match up to standards. There may be other inconsistencies that can help your case for a loan modification. The fourth thing you can do is writing a hardship letter. In the event that your lender does allow you to begin the process of a loan modification, you will need to be able to provide them with a letter of hardship, along with a list of your spending and proof of income. Be completely honest with your hardship letter. Remain straightforward with your request, and explain why you are unable to afford your home. To avoid falling through the cracks, make sure you get all of your paperwork in on time. Lastly, do the math and ask for the terms you want. Work to receive that loan modification, and then see if you can afford the lowest possible amount of payments. Many non-profits have counselors who are available to help people with their loan modifications. Professional help, such as an attorney, can also be advisable. Have all the right terms to propose to your lending mediator, and doing the math will help you prove that modifying the loan will be more profitable than foreclosure.