How to avoid foreclosure
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How to avoid foreclosure

Prevent losing your home ...

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A mortgage is something that most adults look forward to having at sometime during their lifetime. Along with the pleasure of owning a home, there is the immense responsibility that goes beyond the actual upkeep of the home. There are the actual payments that must be made to the mortgage company every month, and property taxes, which include both the summer and winter months. Mortgage companies also require that borrowers obtain and maintain a certain amount of homeowners insurance for the property.

Some people never encounter financial problems that cause them to become behind on their mortgage payments, but unfortunately, many people do experience unexpected problems that can cause them to have trouble paying their important bills each month, including their mortgage. These problems may include a sudden job loss, pay cut or a serious illness that results in time off work. If by chance any of these unfortunate situations do occur and you find yourself facing a perspective foreclosure, you need to know that you have many options available to you that can prevent you from losing your home.

Communicate With Your Mortgage Company
Most mortgage companies may be willing to work out some type of special repayment plan in order to allow you to get caught up on your loan, especially if youíve had a good payment history with them in the past. Itís your responsibility to let them know whatís going on, because they canít help you if they donít know about your financial hardship. Another thing to remember is that when youíre even a day or so behind on your payments, your mortgager can and will call, sometimes every day. Donít ignore their phone calls and donít promise to make payments on specific dates unless youíre sure youíll be able to keep those promises. You want your lender to know that your credibility level is high. This is very important because it will make them more likely to assist you in ways that they otherwise would never even consider, if youíre upfront and honest with them.

Credit Counseling & HUD
HUD, which stands for the U.S. Department of Housing and Urban Development, is a federally funded agency that assists people with all aspects of homeownership. One way that they provide assistance is by providing help and hope to those in jeopardy of losing their homes. There are special counselors that can provide credit counseling and refer you to agencies in your community that may be able to help you get caught up on your mortgage. They may also be able to refer you government agencies who have special programs and funding for people in your situation. The HUD housing counseling agency can be reached by calling: 1-800-569-4287.

Try Refinancing
Believe it or not, there are some banks and lenders that may be willing to refinance your loan despite the fact that youíre on the verge of foreclosure. You may be required to make a mortgage payment or two, depending on how far behind you are, before the final approval and closing. This is a great option because you not only have a fresh start and donít have to worry about the previous mortgage company any longer, but you could possibly even borrow more money than you need to pay off the first loan, which would allow you to have extra money until you can get your finances back in order. Your interest rate may be somewhat higher than you like, but you will soon realize that itís worth it to be able to keep your house. Besides, you can always refinance again in six to twelve months and receive a lower rate.

Bankruptcy, A Last Resort
Although not for everyone, bankruptcy may be a last resort option if you find yourself in jeopardy of losing your home despite repeated attempts to get assistance using less drastic methods. If you do ultimately decide to file bankruptcy, be sure to file chapter 13, since chapter 7 will not guarantee that you get to keep your home. One positive thing about chapter 13 bankruptcies is the fact that you can include all the debt that you may have, and the judge will decide how much you must pay on your bills. You make payments to the court each payday and a court officer pays your bills. The downside of bankruptcy is the fact that when the judge determines how much you will pay out of each paycheck, they donít look at how much money you actually makeóit could be as much as three quarters of your incomeóbut you must may the payments or suffer the consequences. This is why bankruptcy should be used only as an absolute last resort to save your home.

If none of the above steps help you, then there is always your local social services agency. Most state social services agencies offer state emergency relief funds that can aid you in catching up on your payments, subsequently saving your home. With a little resourcefulness and a lot of persistence, you should be able to find the help that you need, even if you have to hire a good attorney to help you with your quest. Donít give up and settle for losing your home, because there is help available; all you have to do is swallow your pride and ask for the assistance that you need. (don)
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