5 Signs You May Be Headed for Foreclosure
When adjustable rate loans are either at or near the end of their initial terms and are set to increase, buyers sometimes face the prospect of having their payments climb higher than what they can afford.
Undoubtedly, some foreclosures will be inevitable however there are early warning signs to recognize and steps you can take to help avoid losing your home altogether.
Having too many monthly bills
Are you having trouble paying your current obligations such as car payments, credit cards, and utilities? If you are beginning to juggle your payments it’s time to review your budget. Find areas in which you can trim your spending. Perhaps you have a cable package that has more channels than you can watch. Trim the package to save, or cut out the cable altogether. Having cable is a luxury, having a home is a necessity. If you are at risk of foreclosure, try to eliminate as many monthly financial obligations as possible to recover money for your mortgage payment.
Keeping expensive habits
Smoking, excessive dining out or entertainment such as going to the movies can all be cut as they are unnecessary expenses. Avoid further credit card purchases other than for absolutely necessary items. Rely on your cash at hand. If you don’t have the money, the purchase can likely wait until you do.
Ignoring rate changes and writing off refinancing
Is your house payment about to increase? If you are a recent homeowner and signed an adjustable rate mortgage perhaps it is time to review your paperwork again. Find out when your rates will change and to what degree. Keep your credit healthy. Make all of your payments on time. The better your credit score, the better your interest rate could be when you attempt to refinance.
Refinancing to a fixed interest rate could be the key to regaining control over your finances.
Holding on to your home too long
Is your house larger than your needs? It may be possible to sell your home and break even. Downsizing can be a way in which you can avoid the foreclosure catastrophe altogether. Your house is not guaranteed to sell for the amount you need it to. While you wait to see, you will still want to take other actions such as creating a lean budget that allows you to pay more towards your mortgage.
The worst thing that you can do is to do nothing. It’s important to face the issue head-on. Make sacrifices as needed. Prepare today for tomorrow and remember to keep an open line of communication with your lender. They may have a hardship program that allows you to defer or pause payments long enough for you to adjust to the higher mortgage payment.
If you have any questions, would like to discuss your financial challenges, or are just looking for advice, please call us at your convenience. As always, we are here to help and look forward to hearing from you.
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