6 Ways To Deal With Foreclosure
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
6 Effective Ways to Manage Foreclosure
Overview:
In 2007, over two million foreclosures were reported, with California, Texas, and Florida leading the statistics. Alarmingly, 1 in 200 homes may face foreclosure, according to the Mortgage Bankers Association.
If you find yourself facing foreclosure, it's crucial to act swiftly. Start by cutting unnecessary spending and contact your lender’s foreclosure department to discuss your financial difficulties. Get any agreements with your lender confirmed in writing, and consult a tax advisor to understand any implications. Remember, there are several strategies you can adopt to potentially save your home. Here are six helpful tips:
1. Short Sale
Consider selling your home for less than the remaining mortgage balance. A short sale avoids foreclosure, does not require bankruptcy, and is quicker to process. The lender saves on legal costs, while the buyer purchases the house at a reduced price.2. Partial Claim
You might qualify for an interest-free loan from the Housing and Urban Development (HUD) agency to update your mortgage payments. Check the HUD website or call 800-CALL-FHA for details on eligibility.3. Special Forbearance
Your lender may offer a repayment plan tailored to your financial condition or temporarily reduce/suspend your payments. This option could be viable if your expenses have increased or your income has decreased. You’ll likely need to provide proof of your current financial status.4. Deed-in-Lieu of Foreclosure
Offer your home back to the lender voluntarily. This option might bolster your chances of securing another mortgage in the future.5. Mortgage Modification
Refinance the owed amount and extend your loan terms to cover missed payments. This option suits those who’ve recovered financially but whose income hasn't fully rebounded.6. Pre-Foreclosure Sale
Selling your property before foreclosure can help pay off your mortgage and protect your credit score. If continuing payments is not feasible, selling the house yourself before the foreclosure date lets you retain some equity. Consult a Realtor and tax advisor to understand the rules associated with this option.Pro Tip:
Ask the lender if the chosen option will be reported on your credit history, and if possible, request that it not be. When facing foreclosure, immediate and honest communication with your lender is vital. They are more willing to assist if you openly discuss your situation. Stick to any agreements made and adjust spending habits to avoid similar financial issues in the future.By taking proactive steps, you can find a solution that best suits your situation and minimize the impact on your financial future.
(Note: Originally published at Ezine Articles.)
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