How to prevent foreclosure.

Foreclosure, pre-foreclosure, or default as we know it, is one of the most difficult and stressful situations to be in. So how did we get into this foreclosure situation? Did you lose your job, unexpected illness, took a pay cut, or lay off from work? In this topic, we will explain how to combat foreclosure and save your credit from being impacted if you are not able to prevent it.

Let’s be honest not everyone will be able to avoid foreclosure, but you as a homeowner can prevent the long-term effects such as credit damage, or possibly bankruptcy. We buy houses in foreclosure for cash quickly is an alternative solution. The first thing I share with new homeowners is to start a weekly budget and don’t deviate from it for anything, as this creates discipline and set you up for successfully paying your mortgage on time. I use this formula; first, we total up all monthly expenses such as gas, food, entertainment, insurance, mortgage, cell phone bills, etc. We divide that by 4 which gives you your weekly budget allowance to prevent falling behind.

Image of a person doing a budget using a calculator.
Image of budget preparation.

This next piece of information on foreclosure prevention is one of the most crucial parts of maintaining your good standing with the mortgage company. Communicate, communicate, and again communicate. The worst thing you can do is know that there’s going to be a late payment or no payment at all, and not call the mortgage company to let them know. Yes, I know this is very uncomfortable to do, but it is a must! Remember each month that goes by with no payments the more likely you are to default on your mortgage. Most mortgage companies start the foreclosure procedure after 3 months of nonpayment.

The next phase of foreclosure is unlimited mail and phone calls from the mortgage company. Most people try to ignore all the warning signs from the mortgage company, hoping that it will just go away, and this is so far from the truth. We must keep communicating with them, and ask for payment deferrals, a mortgage restructured payment plan, or even a refinance option to catch up on the payments.

Image of a past due mortgage letter.
Image of past due mortgage

The last piece of advice I will offer to a homeowner is not to wait too long to ask for help and be honest when speaking with potential companies that can provide solutions. Be open to solutions that can benefit you in the long run as there are many ways to solve the problem of foreclosure.

Image of a man reading a foreclosure letter.
Image of a man reading foreclosure mail.

So to recap how to prevent foreclosure

  • Weekly budget
  • Communication
  • Don’t ignore warning signs
  • Be honest with yourself and the companies you’re seeking help from.
  • Be open to alternative solutions to resolve the issue.

I hope this information is valuable for homeowners facing foreclosure.