Owning a home can be a gratifying experience in the life of many people. While homeownership can be an emotionally rewarding experience for an individual or family, it can sometimes be difficult to manage some of the financial matters associated with owning a home. These difficulties may lead to a foreclosure. We’re going to explain what a foreclosure is, how to prevent it, and where you can find help if you are currently in foreclosure.
Since many people use mortgages to purchase a new home, it’s essential to understand some of the warning signs that may indicate a foreclosure is imminent. The following information will provide simple suggestions and tips on how one can prevent a foreclosure.
What Is A Mortgage Foreclosure?
Foreclosure usually takes place after an individual stops paying his or her mortgage payment for at least a few months. In most cases, the lender will offer an individual several opportunities to refinance the mortgage or develop a re-payment plan. If possible, it may be a good idea to accept these offers from the lender.
If an individual has lost their job, it may be possible to get temporary mortgage assistance from the government. However, the availability of this assistance can vary based on one’s previous income and other factors. Similar to unemployment benefits, there are usually strict limitations surrounding the use of mortgage assistance, and not everyone will qualify. However, it never hurts to ask!
With the current backlog of delinquent mortgages, many banks can take several months or even a year to process a mortgage foreclosure or short sale. During this time, homeowners are allowed to remain in their homes. In addition, this time can be used as an opportunity to try to work with them to prevent the foreclosure or short sale from actually happening. While it can be challenging to force a bank to refinance on a home in foreclosure, it is sometimes possible to do this before an eviction takes place.
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How To Avoid A Foreclosure Before It Happens:
There are several ways one can avoid going through the hassle and inconvenience of a foreclosure. When buying a home, it is imperative to make sure that it is within one’s budget. In many cases, it’s a good idea to avoid buying a home that costs more than two or three times your annual income. In addition, you’ll also want to make sure that you have good job security and are in good financial standing in case of problems.
For example, it’s an excellent idea to make sure that you have at least $5,000 to $10,000 saved in a savings account prior to starting any mortgage application. This is in addition to the initial down payment on a mortgage, which is usually 20% of the purchase price. Closing costs, home inspections, pest inspections, and other unforeseen expenses can really start to add up when buying a home.
Conclusion –
If you are able to provide yourself with a large enough financial buffer, then it’s very likely that you’ll avoid many of the problems that are associated with a foreclosure and the reasons a foreclosure happens in the first place.
If you do feel that you might be facing a foreclosure in the near future, then it’s a good idea to call a Housing Counseling Agency right away and seek their help. These counseling sessions are free of charge and completed by an accredited non-profit housing counselor. If you’re a Pennsylvania homeowner, Call AdvantageCCS today at 1-866-699-2227 and ask for our housing counseling department. We provide free Foreclosure Prevention Counseling to all Pennsylvania residents.
