Foreclosure happens when we miss payments on our mortgage loans from other parties, such as banks or personal lenders. It is legal for them to take over our home if we can not pay the loan. That means we have to move out from our home even if the mortgage of the home is less than our loans. We are still obligated to pay the balance or we will face serious judgment. So what should we do to avoid foreclosure?
1. Do Not Forget Your Loan
One solution to avoid foreclosure is making notes about your mortgage loans because sometimes we are easily forget our debt when we are very busy about our business.
At the very least we need to keep some information about our mortgage loan, such as:
- The name of lender or bank.
- The total amount of our loans.
- How much is the monthly installment.
- The balance of our loans.
2. On Time Payment
To avoid foreclosure, we must pay our loans on time. Mark down on our schedule when we have to pay our loans. We need to allocate some portion of our wages for our mortgage payment.
3. Do Not Ignore Letters from Your Lender
If we get notification from our lenders, please do not ignore it to avoid foreclosure. If we do not respond their notification, they will question our responsibility of the loans. Thus, they may foreclose our home in response.
4. Asking to Extend the Term of Our Loan
To avoid foreclosure, we need to measure our capability whether or not we can pay our monthly installment. If we can afford the installment, then we have no problem. But if the installment is unaffordable we need to find a solution how to make it affordable. We can ask our lender to extend the term of our loans and reduce the installment.
The last key to avoid foreclosure is making sure that the monthly installment is no more than 30% of our wage. It will make it affordable for us and we still enjoy our life.