Did you know that there has been a 75% increase in foreclosures across the nation in the past year? On the street, where I live there are 7 homes in foreclosure right now. It is pretty scary for a lot of folks out there. Whether it is because of a family emergency, loss of job or subprime loan percentage rate readjustment that is making your house no longer affordable, it just does not matter. All that matters is that you may no longer have a house to live in.
Let me tell you a true story. My husband and I had our house foreclosed on a few years back. We were really scared because we thought that no one would rent to us! Our credit scores were horrible and we had not rented in over 10 years. We finally found someone to rent to us off of Craigslist. We moved in right away. About four months went by and I woke up to a notice on the door. Our landlord was getting the house we were living in foreclosed on. Needless to say, we had to move again.
Today we are going to talk about how to avoid foreclosure on your home. Most of this is common sense, but it cannot be stressed enough.
So the first you need to do is be honest with yourself and what your capabilities are. I don’t claim to have any miracle answers for your situation, but i will talk about the first things you can do to try avoid foreclosure. There are three things that you need to do first.
1. You need to evaluate your living expenses, income and bills.
2. You need to contact your mortgage holder.
3. You need to contact an attorney that is familiar with foreclosure proceedings in your state.
Let’s start with evaluating your living expenses. The first thing you need to do is cut out everything that you do not need. Here are a few items that you need to consider:
o Eating out, Buying at expensive grocery stores
o Cable TV, Cell Phones – switch to LAN line
o Entertainment
o Buying Clothes, DVDs, CDs, extras
o Vacations
o Gym memberships, Tanning memberships, etc
o Stop using AC, Keep heater off, wash dishes by hand
Determine if there is a way that you can make extra money. You could have a garage sale, sell your 2nd car, take a 2nd job, and put your house up for sale if need be.
Now, you need to consider what bills you can actually afford to pay. The first thing to do is to quit paying your credit cards. You need to pay your basic living expenses; gas, electric, phone, food, insurance. Now, you need to pay your mortgage or what you can of it. Everything else should go on the back burner.
It is important that you contact your mortgage holder. They will probably tell you that there is nothing you can do until you miss a payment or two. That is okay. If they tell you this, then you need to make a decision.
You have to decide whether or not you want to stop paying your mortgage or if you want to keep paying it. Here is the key- in just the past few months, mortgage holders are actually working with customers now. They will usually give you three options. The three choices are lowering your interest, adding the behind payments to the end of your note, or renegotiating your loan.
Once you have done that, you should contact an attorney familiar with foreclosure proceedings in your state. It is very important to know what to expect if you decide to let your house go or you simply end up in foreclosure. Many people make the mistake of reading about foreclosure but not realizing that each state has different laws. For example in some states if you do a short sale instead of a foreclosure, you can be responsible to pay back the difference of what you owe to the lender. This could be thousands of dollars.
It is important to ask the attorney these kinds of questions:
o Detailed timelines & what to expect
o Do you have to pay back the difference in $$ if it is sold for less than what you owe.
o Do you have to pay income tax on the difference both federal & state?
o If you are considering bankruptcy should you file before or after you go into foreclosure.
You need to find a good resource that will help you with all of these things. One that will give you a free debt analysis, gives you access to the best attorneys around at dirt bottom prices; one that will help you with debt negotiation, and help you raise your credit scores.
Angela Giles is a noted publisher on financial issues. She is the author and publisher of [http://www.debtfreexyz.com]
Author: Angela K Giles
Article Source: EzineArticles.com
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