Avoid Foreclosure! 6 Ways To Save Your Kamloops Home

Posted by Steve Harmer on Wednesday, September 7th, 2016 at 3:36am.

Worrying about debt is stressful. Worrying about how to avoid foreclosure is one of the most stressful situations someone can find themselves in.

If you’re struggling to make your mortgage payments or if you can’t pay your mortgage at all right now, there are things you can do that will help you to avoid foreclosure and manage your situation better.

It would be a good idea to take action regarding the following tips if you’re one, two or three payments behind on your own mortgage. There are many homeowners in different kinds of scenarios some include death in the family, divorce, job loss, or medical emergencies that lead them to falling behind in foreclosure. The great news is because there are methods to prevent foreclosure and save your house.

Before You Plan to Sell Your Home

Your lender can also provide you with information about your mortgage terms and conditions, including how much it would cost to pay off your mortgage or move it to another property. This is important if you think that you may want to sell your home and look for something more affordable to rent or buy. However, before you consider selling your home, take a look at how much your debt payments, other than your mortgage, are costing you.

Ask for Help as You Consider Options to Alleviate Financial Hardship

Stress impacts our ability to think about our situation clearly. Although they might not be your first choice, don’t automatically rule out speaking with a trusted family member or friend. They care about you and don't want to see you struggle. Getting their insight could help because they might be able to suggest something you hadn’t thought of. But go easy on them if they point out something you don’t want to hear; they’re only trying to help. If they aren’t able to suggest anything specific to alleviate your financial hardship, at least they can support you as you look at other options.

Dealing with Other Debts Might Be the Right Solution

If you notice that your debt payments are a lot each month, getting debt relief from your line of credit or credit card payments might mean that you can get back on track with your mortgage payments. Debt payments that use up more than 25% of your take-home pay each month are considered a lot. Before you consider selling your home or taking drastic measures to get mortgage debt relief, getting help dealing with your other debts might mean that you can manage your mortgage payments again.

Lender refinance on your home

Your lender may be open to refinance your present mortgage, depending on your own circumstances.

Consider Your Expenses

Part of dealing with your debts means knowing what your income and expenses are. Most people know how much money is coming in, but they’re less clear about where it’s all going, especially when they’re dealing with stressful circumstances. Start by jotting down all of your fixed expenses. These are the things you need to spend money on each month and the amount is usually the same. Some examples of fixed expenses are your mortgage, utility payments, daycare, gas (for your car) or a transit pass.

Then grab you bank statement or credit card bill and add expenses to your list that aren’t as regular. These variable expenses are there every month, but the amount changes. Some examples of variable expenses are groceries, eating out, entertainment, recreation, coffees / snacks, or even cell phone bills. Variable expenses aren’t optional; you do need to spend money on them, but you have more flexibility about how much you spend on variable expenses versus fixed expenses.

Ask About A Repayment Plan

Here, the mortgage company will let you payback missed payments with time by adding it to your mortgage statement. For example, in case your mortgage is $1,000, the lender will add $100 over the course of 12 months to refund a missed payment.

Create a Budget

A budget needs to be realistic and based on your current circumstances. If you’re facing reduced income, focus on your priorities and take care of the basics for now.

Reduce Your Spending or Increase Your Income

After you’ve got your budget outline, you’ll likely see areas where you could cut back a bit with your spending. Start with expenses that are easy to reduce and try cutting them back by half. Quitting cold turkey is hard because you’ve developed your spending habits over the last number of years. Your circumstances are stressful enough – don’t make them worse by setting yourself up to fail. And if there’s something you really can’t cut back on, look for ways to increase your income even just a bit. Could you take in a student or tenant, could you rent out your garage, have you got space out back for someone to park their RV during the off-season, could you take on an extra shift each week at work, or maybe your teenage children could start working part-time to earn their own spending money.

Negotiate A Loan Modification

Under scenarios that call for adjustable-rate mortgages, a homeowner’s interest rate will be frozen by the lending institution to a rate that is manageable. Instead, the lending company may extend the amortization period, allowing you more time before the rate of interest reset.

Ask If You Can Get Debt Forgiveness

It does occur on occasion, although this really is extremely uncommon. For the missed payments the lending institution will waive your duty under this particular arrangement so provided that you make payments on time.

To avoid foreclosure you need to prevent a Notice of Default filed against you by the lending company. A Notice of Default is a public notice that says a homeowner is at least 60-90 days behind on mortgage payments and unless payments are made present the lending institution will confiscate the house. Lenders would much rather not file for foreclosure, this is a costly procedure for them (~$30,000 – ~$40,000) and they’re not in the company of owning houses. Nevertheless, a Notice of Default will file to safeguard their interests. In the event you believe you may not be able to pay your mortgage as a result of unexpected adversities then you definitely need to think about these options.