3 Solutions To Help Prevent Foreclosure

1. Talk to your bank as soon as you know that you are late on a payment and ask for a workout agreement. The sooner you start an open dialog with your bank the better. I know that it can feel humiliating to lay out your financial story to some stranger at a bank. But the only way that you are going to get them to help prevent foreclosure is by being honest about where you are at financially. Many banks are willing to work with you to work out some sort of arrangement so that you can keep your home. This may come in the form of a forbearance (temporarily stopping the mortgage payments), a loan modification or some other arrangement that the bank can do to help you with your current financial situation.

2. If you owe more money on your house than what it is currently worth, talk to your bank about the possibility of a short sale. If you cannot or do not want to stay in your home, a short sale may be the perfect option to help prevent foreclosure. Different banks will have different requirements so be sure to fully understand what your bank’s policies are and what paperwork you will need to provide them in order to get them to agree to a short sale.

Do not let anyone tell you that a short sale is an easy way to get out of your home. It is not. There is a lot that you need to provide to the bank, including a willing buyer, and even then they may or may not agree to a short sale. This solution is a gamble and not a sure-fire way to get out of your home. And most banks will take their own sweet time letting you know whether or not they will agree to your short sale or not.

3. Take a good hard look at your finances and see where you can cut back. There is a reason why you are in the financial predicament that you are in. It could be unavoidable life circumstances or it could be avoidable life choices. How much money are you spending on avoidable luxuries like eating out, clothing, massages, gym memberships? You can help prevent foreclosure by simply cutting back on unnecessary luxury items. You will find that it is amazing what you can live without if you really need to. Before you make a purchase, ask yourself if you would rather have that item or have your home to live in. For me, asking myself that question shed a whole new light on every single purchase that I made.