Owning a home is a serious responsibility. It can be extremely challenging—even during good times. In this period of economic uncertainty, foreclosure has become a top concern for many homeowners.
There is an alternative to giving up and surrendering to your house to the bank. Take responsibility and fight for your home. A few tips to stay out of foreclosure:
• Buy a house you can afford.
Of course, this is the first thing you should have done. For the most part, our current housing crisis came from people purchasing homes above their financial resources. Yes, it can be exciting to have a pretty, big home. Unfortunately if you cannot afford it, that new home becomes a millstone around your neck—a financial disaster!
• Pay on time and in full.
It may be obvious—nobody should have to tell you—but the best way to stay out of foreclosure is to make your payments, on time and in full. If you struggle to make payments—have a plan. Sell off the extra items you do not need. Have a garage sale. Cut back on the weekly nights out, or fancy dinners. Do something—anything—to stay within your means.
• Have tax refunds forwarded to your mortgage company.
Tax refunds can easily move towards paying off your home. Look at it as if the government is your savings account, and overpayment on taxes is the return on your savings—let it go to the most valuable asset you have, your home.
• Eliminate consumer debt.
Cancel the credit cards, but first agree to pay them down. Some credit card companies will help you out—especially if you are in foreclosure. Be proactive with your debt!
• Have a savings account with at least 6 months of expenses.
By saving, you have padding for when things get bad—and the threat of foreclosure can be bad. Really bad.
• Get a second job.
A second job should not be for luxuries or walking-around money. Every penny must move towards keeping your home, and staying out of foreclosure.