What Can a Homeowner Do to Avoid Foreclosure?

by admin on September 13, 2010

Question:

What can a homeowner do to avoid foreclosure?

Answer:

It is very important to avoid foreclosure because it has a great negative effect on your credit rating. Even if you cannot do anything to improve your current financial situation, there are still some things that you can do in order to keep your house or property. As much as possible, lenders make negotiations to borrowers or homeowners for them to get away from foreclosure. One of the ways to prevent your house from being foreclosed on is by renting or selling the property. Since homes listed in the real estate market only have little interest which goes for several months, act quickly. Once you feel that you have serious financial trouble, consider selling or renting your home. Renting your home would probably be a better idea since your financial burden will be lifted once you find a tenant who will bring your mortgage payment current.

Most of the time, selling your property is difficult to do because you owe more than the amount of the property’s worth. In addition to this, buyers will definitely not be willing to pay you your full asking price for the property. To solve this situation, talk to your lender and ask whether you are eligible for a short sale option. In short sale, the lender allows the homeowner to sell their home for an amount which is less than the mortgage balance. After selling the property, the lender agrees to free the homeowner from their financial obligations. This would be a very good way to avoid foreclosure however, you should qualify first before you can do this option.

Leave a Comment

Previous post:

Next post: