A foreclosure can be costly, as the lender takes ownership of your property and sells it to recover the debt you owe. In 2020, foreclosures were reported on over 200,000 properties in the United States. 

If you are having trouble with your loan and foreclosure may be looming, making the right choices to avoid foreclosure is crucial. In this article, we’ll look at five important steps that you should take. 

1. Do Not Ignore Defaulted Accounts

It’s important to ensure you take action before facing default on your mortgage loan. Your account will be considered in default if you miss more than four mortgage payments. If you find an email from your mortgage lender related to your account status, don’t ignore it. Many people will put off dealing with an account in arrears until it is too late. 

2. Negotiate with Your Lender

When you find yourself in a situation where you are unable to meet your monthly repayment obligations, you should consider contacting your mortgage lender. Many financial institutions will prefer to work with you to find a way to avoid foreclosure to ensure the outstanding debt is repaid. Explain your situation to your lender and see how you can work out a plan that will allow you to develop a plan of action. 

3. Take Inventory of Your Assets

Your home may not be the only asset of value in your possession. This is why taking inventory of your current assets is a good idea. Consider selling a second car, for example, or some of your jewelry. These things can bring in some capital you can pay toward your debt to keep the account current. While this may seem like a loss, it can save your property in the long run. 

4. Figure Out How You’re Spending Money

Look at your budget and consider how you spend your money. There are often ways to reduce your expenses in some categories, such as cutting back on entertainment or dining out. The extra money you have available after decreasing any unnecessary spending can be used to get your finances back on track faster. 

5. Consider Selling Your Home to a Cash Buyer

If your property has become a financial burden, you can also consider selling it to a cash home buyer. Work with an agency if you wish to sell your home fast. Try to negotiate a good cash deal to ensure you can settle your debt and use the remaining funds for future housing. 

Key Takeaways

When faced with foreclosure, there’s a chance you could lose your property. There are many options you can look at in an attempt to avoid foreclosure altogether. At Manifest Home Buyer, we want to partner with you to determine your best options. 

Reach out to us today, so we can help protect your credit while simultaneously relieving you of some of the financial stress you’re under.