You’ll never forget how excited you were when you first purchased your home.
You knew you’d gotten a great deal on a beautiful home, you followed the suggested advice about how much of a mortgage payment you could afford, and you’ve created years of wonderful memories in your house.
But now, things have changed.
You can no longer afford to make your mortgage payments every month, and you’re well on your way to foreclosure. You need to know what you can do to stop foreclosure from destroying your financial future.
It is possible your home’s value has decreased. It could be that you’ve been dealt an unexpected financial blow. Sometimes, poor money management and high levels of existing debt are to blame.
No matter the reasons, stopping foreclosure is possible — and you may be able to avoid taking drastic measures like declaring Chapter 13 bankruptcy.
Read on to learn some of the top tips to avoid it.
1. Don’t Make This Mistake
You know you’re behind on you’ve been behind on your mortgage payments for the past couple of months, and you know that, if they haven’t already, your mortgage company will call you asking where their money is.
It could be that they’ve already mailed you a notice that you’ve entered into the pre-foreclosure phase.
Though you’re terrified and want to do the right thing and make the payments, the reality is that the money isn’t there. You have no idea what you can do to save your home or avoid the credit hit of a foreclosed home.
It seems inevitable — so you choose to ignore it. The process is too stressful and the mortgage lender has bigger fish to fry than your late payments.
Deep down, you know that just avoiding the situation isn’t going to work.
Take comfort — If you’re in the pre-foreclosure phase, you have far more ways to stop foreclosure than you might think.
If you truly want to avoid foreclosure, pick up the phone and call your mortgage lender. Explain your financial situation, or even write a letter of financial hardship. The lender may be able to work with you to temporarily lower your monthly payments or set up a repayment plan with you.
Stop avoiding opening your mail, too.
Those letters could also contain offers from your mortgage company and other businesses that might be able to help you.
2. Speak With A Housing Counselor
Within the past decade, more than 7 million homes have been foreclosed upon.
Especially after the financial and housing crisis, more and more people were facing foreclosures — and had absolutely no idea what to do.
That’s why the United States Department of Housing and Urban Development (HUD for short) created housing counseling services design to offer foreclosure tips and additional home loan advice.
If you want to prevent foreclosure, you should absolutely take advantage of these services. They’re free, legitimate, and help you to learn about options you likely never would have discovered on your own.
These counselors can help you to come up with a repayment plan and may even be able to speak to your lender in the negotiation process. They’ll also explain the foreclosure laws in the United States (and Hawaii in particular) to you so that you can feel confident that you know exactly what your legal responsibilities are.
Be aware that you should only work with a HUD-approved counselor. Unfortunately, there are quite a few scammers out there that take advantage of you when you’re at your most vulnerable.
Remember that no one should charge you for advice alone, and if they do, it’s a clear red flag. Walk away.
3. Take a Hard Look at Your Budget
Maybe you’ve only missed one mortgage payment or have only just received your pre-foreclosure notice in the mail. But even if you’re in serious trouble with your mortgage payments, you should still evaluate your monthly budget.
You might be surprised by just how much you’re able to save if you’re willing to go without some things for a few months. More than 30% of Americans say that they don’t budget at all — and if you’re among them, this could be the reason why you’re in trouble.
Look at your past credit card statements and bank account withdrawals.
You might find subscription fees that you don’t use, realize just how much you’re eating out every month, and identify other ways to save.
Switch to paying with cash only to help you stay on target. Separate your cash into envelopes for things like groceries, transportation, entertainment, and childcare. Once the money is gone, it’s gone. Knowing that is a great incentive to stay within your budget.
It sounds like basic common sense, but if you don’t currently have a budget, it may just be the solution.
Now is also the time to consider any and all assets that you currently have.
Are you able to sell your car, jewelry, clothing, and furniture or even dip into some savings or sell off investments to help you stop foreclosure? If so, do it.
4. Look Into HUD Programs
HUD does much more than just offer homeowners advice about foreclosure avoidance.
The government also has numerous programs specifically designed to help stop foreclosure.
First, we suggest that you look into the Home Affordable Modification Program (HAMP for short). This program helps homeowners lower the cost of their monthly mortgage payments to just 31% of their monthly pre-tax income, meaning that the payments won’t be as much of a financial strain as before.
Usually, you’ll see a roughly 40% drop in your overall mortgage payment each month.
You should also research the Principal Reduction Alternative plan, especially if your home has drastically decreased in value over the past few years. This program negotiates with your lender on your behalf to encourage them to reduce your overall mortgage cost.
If you’re currently unemployed, you may want to consider the Home Affordable Unemployment Program (UP.) While you’re looking to find another job, the UP program allows for a temporary suspension or drastic reduction in your mortgage payments.
When you speak with a HUD counseling representative, make sure you ask if you’re eligible for any of these services.
5. Sell Your Home to a Cash Buyer (like us)
We’ve saved the best way to stop foreclosure for last.
If you know there’s no way you can afford to make your mortgage payments but can’t wait for months to sell your home through a real estate agent, you should sell your home to a cash buyer.
But what are the benefits of doing so?
First of all, you won’t have to make any repairs or renovations to your home. Cash buyers are interested in your property as it is. Additionally, the cash-for-homes process usually works incredibly quickly — which is imperative if you’ve already entered into the pre-foreclosure process. If you want to receive any money for your house, it NEEDS to be sold before the bank forecloses on it — and this is what we specialize in.
In most cases, you can have a fair cash offer on your home within one day, and you can close in just a couple of weeks. (We’ve built an incredible reputation and track record of helping people get out of foreclosure.)
The value of your home is determined by your neighborhood, the general housing market, what can be built on your property, and many other factors.
Plus, reputable cash for home companies don’t even charge you commissions or real estate fees. They’ll also take care of the closing costs for you — which means you’ll be able to avoid a major expense.
This means that you can have a clean financial slate in no time and start working towards a better financial future so you don’t end up in a similar situation down the line.
Are You Ready to Stop Foreclosure in Hawaii?
When you need to stop foreclosure, you often have more options than you think.
In most cases, you’ll likely end up selling your home for cash. But how do you know which cash buying company you should work with?
When you’re ready to sell your Hawaii home to a cash buyer, we want to be the company that you work with. We have years of experience and excellent testimonials from homeowners we’ve worked with.
We’re committed to giving you a fair offer on your home. We don’t charge fees and commissions and we can usually give you an offer in just one day.
Don’t let foreclosure dampen your future and continue to cause you great emotional pain.
Instead, reach out to us or fill out the form below and begin the selling process so that together, we can come up with a solution.