Want to avoid foreclosure homes? With housing prices and mortgage rates continuing to rise, many home buyers are having a hard time affording the costs of owning their own homes. Unfortunately, more and more people are now having issues with keeping up with their mortgage payments and risk losing their homes as a result. As of the second quarter of 2018, the foreclosure rate in California is at its highest in nine years.
With so many CA residents struggling to stay in their homes, here are some tips to avoid foreclosure homes. With these helpful suggestions, you can save yourself from going into foreclosure homes in California.
7 tips to Avoid Foreclosure Homes in California
There are a number of different circumstances that can lead to foreclosure homes. If you’re thinking about buying or selling house in California, here are some tips to help you avoid foreclosure homes and make sure you have all your options covered at all times.
Know Your Options
First and foremost, you have to know your options. The first step is to consult with a housing counselor to fully understand your options. They will be able to assess your financial situation and advise on the best course of action for your specific case. With so many different options available to people in financial distress, it can be hard to know what is best for you and your specific situation. A housing counselor can help you navigate the different options and figure out the best way to proceed based on your specific circumstances.
Don’t Stop Paying Your Mortgage
If you are having trouble keeping up with your mortgage payments, the very last thing you should do is stop paying your mortgage.
In fact, you should do the exact opposite. Rather than stopping your payments all at once, consider instead making smaller payments on a more frequent basis. This way, your lender is less likely to notice that you are paying less than you normally would. If you are being consistent with your smaller payments, you will look like a sound investment. Your lender may be more willing to work with you and help you keep your home.
Negotiate With Your Lender Or Servicer
If you have tried everything and you still can’t afford your mortgage payment, you can try to negotiate a modification with your lender. You may also be able to negotiate with your servicer to set up a payment plan tailored to your specific financial situation.
This is one of the best options for keeping your home, but it does take patience. Depending on the backlog, it may take a long time to get a response from your servicer. You may also be required to submit documentation of your income and expenses, and complete a financial analysis.
Reduce Debt And Build Equity
If you already own your home and you are struggling to keep up with your mortgage payments, the best thing you can do is try to reduce your debt and build equity in your home as quickly as possible. The more you can reduce your debt, the better your financial situation will be overall. Equity in a home is the difference between the home’s value and what you owe on your loan. The more equity you have in your home, the more options you have available to you when facing financial hardship.
Consolidate Loans to Avoid Foreclosure homes
If you own more than one type of debt, like a mortgage and credit card debt, you may be able to consolidate these loans into one single loan. This could help lower your monthly payments and make it easier to stay on top of your finances.
The trick to this, however, is that you have to have good credit and a high income. If you do, you may be able to refinance your loans and pay them off faster.
Find Out If You’re Eligible For A Short Sale Or Deed-In-Lieu
Depending on your specific situation and the value of your home, you may want to talk to an attorney about the possibility of a short sale or a deed-in-lieu. A short sale is when you sell your home for less than what you owe on the mortgage, and you then use that money to pay off the remainder of your mortgage and other debts. A deed-in-lieu is when you give up your home completely, as opposed to making a payment on it, as in a short sale. A lender must accept the deed-in-lieu as full payment of your mortgage loan. This option is more common in California’s judicial foreclosure process.
Watch Out For Hidden Costs And Scams
Unfortunately, along with rising interest rates and home prices comes to a rise in scammers trying to take advantage of this housing crisis. Be on the lookout for scammers who will try to convince you to give them money in exchange for help with “helping” you keep your home. These scammers will try to convince you that you qualify for programs that you don’t actually qualify for.
That’s why it’s important to work with a reputable lender or servicer who is actually able to help you stay in your home. Working with a reputable lender will cost you less in the long run.
Homeowners in California are at risk of losing their homes this year more than ever before. With housing prices and mortgage rates continuing to rise, many home buyers are having a hard time affording the costs of owning their own homes. Unfortunately, more and more people are now having issues with keeping up with their mortgage payments and risk losing their homes as a result. With so many residents struggling to stay in their homes, here are some tips to avoid foreclosure homes in California. With these helpful suggestions, you can save your house from going into foreclosure!