Keep Your Home: 4 Tips to Avoid Foreclosure 

 August 21, 2019

By Scott Teesdale  

minutes read time

Homes are often treated as points of pride or as accomplishments for those who purchase them. They’re a large investment, and when you find yourself unable to make mortgage payments on your home, it can be a huge blow to your self-esteem. Being at risk of foreclosure can feel embarrassing, but you‘re not alone. 1 in 200 homes will be foreclosed upon in America. Foreclosure can harm your family and your psyche. It can be frightening to think about your missed mortgage payments coming back to haunt you in such a profound way. However, you don’t have to relinquish your home. You can take quick actions to save your home and save yourself the headache of the foreclosure process. Here are four tips to avoid foreclosure if you feel at risk.

Research your options

The United States government has many programs in place to help those who are at risk of losing their home because of the inability to pay their mortgage. You should assess your situation to find the program that best fits your issues. If you feel you would be able to afford your payments if they were only 31 percent of your monthly income, the Home Affordable Modification Plan can reduce them to that amount. Or, if your home is worth less than what you owe because of declining property values, the Principal Reduction Alternative might work for you. There are also options for you to get a temporary pause on your mortgage payments if you’re unemployed and struggling to find work. All of these programs are offered by the Department of Housing and Urban Development.

Reduce external costs

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Because your financial priorities should always be your personal and family health and your home, a great way to avoid foreclosures is to reduce the amount of money you’re spending on unnecessary items and services. Consider canceling any subscription services, or services for which you pay monthly, such as a gym membership or streaming service. The average annual savings from canceling subscriptions is $512, according to a recent CNBC report. These kinds of passive bills can stack up month to month, and the savings from canceling them can help you get back on your feet financially.

Communicate with your lender

One big tip in keeping your home is to make sure you’re always adequately communicating with your mortgage lender. Make sure you open all communications from the company, both email and physical mail. If you contact your lender as soon as you realize you’re having problems making payments, they may have options to help you stay up-to-date on your mortgage payments.

Find a HUD housing counselor

You can find a housing counselor through the Department of Housing and Urban Development in any state. These counselors will be able to help you stay calm and work through all your options for keeping your home and avoiding foreclosure. They can also point you to any government programs for which you qualify. The housing counseling service through HUD is completely free. It’s important to remember that you should never be charged for foreclosure-avoidance counseling, because private firms that want you to pay them to counsel you may be trying to scam you out of your home. 

Make sure you stay vigilant as you navigate the foreclosure avoidance landscape. Never sign anything without adequately reviewing it either yourself or with a trusted legal contact. A good rule of thumb is to use only housing counselors who are HUD-provided or HUD-approved. 

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I use data and technology to help Millennials navigate the ins-and-outs of buying or selling a home in today's market. From appraisals to mortgages to zoning, I cover it all with the goal to teach others. Connect with me on social via the icons above.