Owning a home or condo can be a rewarding experience in the life of many people. While homeownership is most often an emotionally gratifying occurrence for an individual or family it can sometimes be difficult to manage some of the financial burdens associated with owning a home. Since many people use mortgages to purchase a new or older home itâ€™s essential to understand some of the warning signs that may indicate a foreclosure is imminent. The following information will provide simple suggestions and tips on how one can prevent a foreclosure.
Foreclosure takes place after an individual stops paying his or her mortgage payment for at least a few consecutive months. In most cases, the lender will offer an individual several opportunities to refinance the mortgage or come up with some sort of re-payment plan. If possible, itâ€™s a good idea to accept these offers from the lender. Try to work with them first and find out what your options are.
If an individual has lost their job it may be possible to get temporary mortgage assistance from the government. However, the availability of this assistance can vary based on oneâ€™s previous income and other factors. Like unemployment benefits, there are usually strict limitations surrounding the use of mortgage assistance.
With the current backlog of late mortgages many banks can take several months or even a year to process a mortgage foreclosure or short sale. During this time homeowners are allowed to remain in their home. In addition, this time can be used as an opportunity to try and work with them to prevent eviction. While it can be challenging to force a bank to refinance on a home in foreclosure it is sometimes possible to do this before an eviction takes place.Â
There are several ways one can avoid going through the hassle and inconvenience of a foreclosure. When buying a home itâ€™s essential to make sure that it is within oneâ€™s budget. In many cases itâ€™s a good idea to avoid buying a home that costs more than two or three times your annual income. In addition, itâ€™s essential to make sure that you have good job security and a good financial standing in case of problems. For example, itâ€™s an excellent idea to make sure that you have at least $10,000 to $20,000 saved in the bank prior to starting any mortgage application. This is in addition to the initial down payment on a mortgage which is usually 20% of the purchase price. Closing costs, home inspections, pest inspections, and other unforeseen expenses can really start to add up when buying a home.
If you are able to provide yourself with a large enough financial buffer then itâ€™s very likely that youâ€™ll avoid many of the problems that are associated with a foreclosure, and the reasons a foreclosure happens in the first place. If you do feel that you might be facing a foreclosure in the near future then itâ€™s a good idea to call a housing counseling agency right away and seek their help. These counseling sessions are free of charge, and completed by an accredited nonprofit credit and housing counseling agency.
Lauralynn Schueckler is the Online Marketing Specialist at Advantage Credit Counseling Service. She is the author for Advantage CCSâ€™s Blog called Dollars & Sense. Advantage Credit Counseling Service is a member of the National Foundation for Credit Counseling. Contact Advantage Credit Counseling at 866.699.2227, or visit them online at www.advantageccs.org.