4 Ways To Prevent Foreclosure

4 ways to prevent foreclosure
For most of us, a house is the most expensive asset we own in our lifetime.  As a homeowner, monthly payments can sometimes pile up, and the monetary strain of a mortgage can quickly become overbearing. Foreclosure is an unfortunate inevitability if you can’t meet monthly mortgage repayments. Job instability, economic uncertainty or tragic life events can swiftly set mortgage costs to be outside of our control.  However, even in times of financial strife, there are ways to avoid foreclosure on your home. How? Here are four examples that can help to stop foreclosure on your home.   

1. Set up a repayment plan

Repayment plans are designed to organize your outstanding payments.  By structuring your repayment schedule, paying off debts becomes a clear, step-by-step process, making it one of the best ways to avoid foreclosure.  How do you know if you’re eligible?  Your first course of action is to speak to your bank or mortgage provider. They will be able to inform you of your capacity to fulfill a repayment plan. Essentially, your financial ability to pay-off current and legacy debts will decide if you can stop foreclosure through a monthly repayment plan.  Furthermore, you should know repayment plans are mid-term solutions to prevent foreclosure. Most plans will only last for 9 months, given the increased chances of someone defaulting on long-term payment plans.  If you’re looking for ways to stop foreclosure immediately, or over a long period of time, it’d be sensible to consider options other than repayment plans. 


2. Modify your loan

Mortgage loan modifications are popular long-term ways to avoid foreclosure.  You can contact your mortgage provider to see if they’ll alter the terms of your mortgage to pay it back in smaller installments over a longer period of time.  However, a word of warning here.  Loan modifications like these will ultimately increase the size of your mortgage. Your mortgage provider will reduce the size of monthly payments but will attach a premium on top of the reduced amount.  When thinking of ways to avoid foreclosure on your home, consider whether you can afford a loan modification for the long haul. Before you know it, you could find yourself in a worse position with more debt. 


3. Short sell your home

Most common during periods of economic recession, short sale opportunities often appear the best way to prevent foreclosure.  When the real estate market dips, or when homeowners engage in costly loan modification plans, the value of a home can become less than what is owed on a mortgage. Putting it simply, you’d be paying more money than is worth your while in this situation.  Why should you do a short sale? Well, short sales can be advantageous for your credit score. When it’s a toss-up between foreclosure and a short sale, creditors will look far more favorably on a short sale. This is a massive benefit not only for selling your home, but also buying one in the future.  However, there are a few obvious downsides to a short-sale scenario when looking for ways to stop foreclosure immediately.  Firstly, there’s no cash incentive for a short sale. All money made on your home sale will go straight to your mortgage provider, taking you out of the driving seat. Further still, you’ll receive no financial endowment from your short-sold house for buying another home. 


4. Sell your home for cash

One of the most popular ways to avoid foreclosure is to sell your house for cash to make the best of a bad situation.  As well as being one of the ways to stop foreclosure immediately, a cash sale means your home is sold in a timely manner. Moreover, selling your home for cash means no fees have to be paid to real estate commissions.  Most importantly, a home for cash sale gives you the power to say ‘yes’ or ‘no’ to the sale. While a short-sale, remove the option to dispute a sale, selling for cash allows you to reject a price if it’s not right. Depending how much time you have before foreclosure, selling your home for cash gives you some flexibility.  Finally, depending on the size of your debts, a sale for cash could leave you with a small pot for buying a house in the future. Unlike selling your home via a short sale, selling your home for cash puts money in your hand. Although your mortgage still exists, you have the autonomy to decide how you pay that debt off.  What if you’re worried about the trustworthiness of a cash home buyer?  You’re right to do so. You want to know the person purchasing your home will give you a fair price and won’t let the deal fall through. Luckily, Boom Home Offer can help. To find out more about selling your home for cash with an experienced vendor, take a look at Boom Home Offer’s range of solutions here.

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