Top 5 Tips to Avoid a Foreclosure
Foreclosures are an extremely unfortunate side effect of an economy in recession, and America has been hit hard over the past five years. Although things got better in 2012, many homes are still being foreclosed on compared to the earlier part of the decade and the 1990’s.
Many still face foreclosure and it can be a scary situation to be in, but there is help. Some people think that everything has to happen overnight to make the situation right, but there are many different avenues that you can go down for a solution. Here are the five best ways to avoid a looming foreclosure.
Refinancing or Loan Modification
This can help with lower payments, which may just be exactly what the doctor ordered. It is usually the first place people turn to if there is a threat of foreclosure, and there isn’t just one option.
There is a program called the Home Affordable Modification Program (or HAMP for short) that will lower your payment to 31 percent of your income in order to make the necessary payments. There are also other similar programs that can help lower your monthly payments, but this is the most attainable if you are on your first mortgage.
Get out of the Underwater Mortgage
The Home Affordable Refinance Program (HARP for short) is the option to go to if the value on your home is declined and thus, cannot receive a traditional refinance. This will assist in giving you consistent payments that you will be able to afford. There is also the Principal Reduction Alternative which can reduce the amount you owe on the house overall.
Work as much as possible
For some, it’s easier said than done. Many companies are cutting back on giving overtime hours and will kick you out the door once you hit the magical 40 hours worked in a given week. For others, it’s not that easy, especially if you are unemployed.
For those that are unemployed, there is an unemployment program that will suspend or drastically lower your payments for up to 12 months while you look for a job that would provide the necessary salary to avoid foreclosure. The minimum period was extended to 12 months so in some states, you may even have more time than that. However, you should hit the pavement as soon as possible to provide evidence that you are attempting to make your mortgage payments in good faith.
Seek a Managed Exit
There’s an alternative called the Home Affordable Foreclosure Alternative, and although you would have to leave for a new home, it won’t count as a foreclosure against you and will still give you a satisfactory home to live in. You can move in to a more affordable house with much lower payments if you are eligible for a short sale or deed-in-lieu of foreclosure through this program. It is not the most desirable option since it includes leaving your home behind, but to avoid foreclosure, this may be the way to go if you simply cannot afford it.
Contract the Federal Housing Administration
They have all of the necessary programs available to help and can be reached at 1-800-CALL-FHA (225-5342). They will help you with options that might suit you best and get you out of the trouble that you may be facing.
With these tips, you should be able to avoid foreclosure no matter what your circumstance is. Whether your hours have been lowered, or cut altogether, there is a way to get out. So keep working hard and don’t be afraid to search for these assistance programs and you will find yourself being able to once again live comfortably and worry free.
Simon Campbell has spent over 15 years in all the various facets having to do with real estate including sales, purchases, investment and research. His experience also includes commercial and residential property management and even real estate appraisal. He is recognized among his peers as an expert in the real estate field. Now after gaining such a wealth of personal experience, Simon has changed directions and is now sharing his knowledge and experience with others through writing, mentoring and consultation.Check out Simon's profile on Simon Google+ and also his blog