How to Avoid Foreclosure On Your House in Raleigh, NC
How to Avoid Foreclosure in Raleigh, NC
What are the best ways to avoid foreclosure? Here are ten tips to help you avoid foreclosure!
If you're a homeowner in the Raleigh, NC, area and cannot make your mortgage payments, the lender may seize your property, evict you, and sell the home as written in the mortgage contract.
Foreclosure is not a good situation to be in since not only will you lose your house, but it can lead to further financial problems. Homeowners always suffer the most in a foreclosure, so it is best to avoid it altogether, especially if you are a first-time home buyer.
Here are ten ways to avoid foreclosure!
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1. Talk to Your Lender
Once you begin having trouble making your mortgage payments, you should contact your lender and explain to them your financial situation. This will allow your lender to work with you and hopefully create a plan that helps you keep your house. Don't stop paying the bills on your mortgage, and don't wait until you can't make payments to act on your financial hardship.
Many homeowners are often embarrassed or scared to tell their lender that they're having money problems. This is more common than most people think, and almost everyone will go through a financial hardship at some point in their life.
Millions of Americans have lost their homes to foreclosure in the last few years. If you're having trouble paying your mortgage, learn about the steps to avoid foreclosure or minimize your debt after it happens. Quick action is the key to success since it can save your home and help protect your credit rating.
Sometimes lenders may accept partial payments for a few months and allow you to make up the difference later or redo your loan terms completely.
When you first contact your lender, let them know everything about your situation, they can help.
Some options your lender may give you include:
Forbearance
This allows you to make a reduced payment, no payment, or an agreed-upon amount and time period. The difference will need to be made up at a later time. Typically, the lender will agree to forbearance if you demonstrate that you will soon receive a bonus, tax refund, or extra cash.
Loan Reinstatement
You agree to make up your missed payments by a specific date.
Loan Modification
The lender agrees to alter the loan terms to assist you in making your mortgage payments. An example would be that the lender may agree to add your missed payments to your loan balance and stretch it out over a longer timeframe. This may lower your payments, though it will result in more interest over the life of the loan.
2. Mortgage Refinancing
Refinancing your mortgage is one of the ways people can lower their monthly payments and extend the length of their loan. Remember that this also extends the total amount of interest you pay. Some lenders will charge closing costs for your refinance that you can roll into your refinanced mortgage with a higher monthly payment.
3. Consider Your Options
Stay positive, and don't give up. Millions of Americans lost their home to foreclosure over the last few years. A foreclosure will significantly reduce your credit score and will make it nearly impossible to buy a home anytime in the immediate future. The profits from selling your home fast don't cover the unpaid portion of your loan, and the lender may sue you for the rest.
If you're having trouble making mortgage payments, your options include:
- Getting Government Help
- Negotiating with your Lender
- Filing for Bankruptcy
- Selling your home yourself
- Giving your home deed to the lender
4. Get Government Help
The Government offers several options to help homeowners facing foreclosure. Two of the top programs are:
The Home Affordable Modification Program: The federal government's Making Home Affordable (MHA) program, the Home Affordable Modification Program (HAMP), is intended to help homeowners who have suffered financial hardship and are in danger of losing their homes to foreclosure. Under HAMP, eligible homeowners may be able to have their loan terms modified and their monthly mortgage payments reduced.
The Home Affordable Refinance Program: Also part of the Making Home Affordable program, the Home Affordable Refinance Program (HARP) helps homeowners who are current on their mortgage payments but expect difficulties shortly and whose loans are owned by Freddie Mac or Fannie Mae. HARP allows distressed borrowers to refinance their mortgages into a fixed-rated, low-interest-rate loan potentially.
5. Beware of Foreclosure Scams
Unfortunately, there are a lot of Foreclosure scams that target homeowners experiencing financial hardship. If you're struggling to make your mortgage payments, you must be wary of scam operators who promise to help you keep your home or sell it for a fee. Some companies are trustworthy, and companies rarely deliver on their promises.
6. Common Foreclosure Scams
There are different types of foreclosure scams. There are common activities among them you need to watch out for, such as:
- Advises that they can stop foreclosure by "helping" you file for bankruptcy
- Offers to negotiate with your lender
- They ask you to sign the title of the house over to them for small rental payments
- Promises to act on your behalf with the mortgage lender and refinance your loan
- Instructs you to pay them directly and not the lender
7. Know Your Mortgage Rights
One of the best ways to avoid foreclosure is to know your mortgage rights and what will happen if you do not make your payments. Since every state is different, make sure to stay up to date on local foreclosure laws. In North Carolina, the foreclosure process typically takes about 120 days, starting when the first payment is missed.
8. Do Not Ignore the Problem
To avoid foreclosure, it is best to stay ahead of the problem before it is too late. The further behind you get on your payments, the fewer options you will have and the more likely it will become to lose your house. If you are receiving letters from your lender, it is important not to ignore them.
9. Pay Attention to Your Spending
Housing is the largest expense for most Americans, and it is also one of the most important ones. By paying attention to your spending and creating a budget, you can see where to cut your spending to make your mortgage payments. This can be done by eliminating any unnecessary additional expenses.
10. Use Your Assets
To avoid foreclosure, it is essential to be smart and utilize all your assets. There are plenty of ways to make extra income, whether to pick up a part-time job on the weekends, start a side hustle, or sell jewelry, a second car, or any unnecessary items for cash.
FAQs
What is an option to avoid foreclosure?
One of the best ways to avoid foreclosure is to seek help from housing counselors and public programs. If you struggle to pay your mortgage, get free help from your local HUD-approved housing counseling agency.
What is the simplest solution for a foreclosure?
The simplest solution for a foreclosure is a reinstatement, but it is also often the most difficult. A reinstatement allows you to pay back the amount you owe towards your mortgage in a lump sum payment before a specified date.
Which of the following allows a borrower to avoid foreclosure?
The best way for borrowers to avoid foreclosure is through a forbearance agreement, which gives them extra time until their financial situation improves. A forbearance agreement provides short-term relief.
Can you refinance to avoid foreclosure?
It is a possibility to refinance your mortgage in order to get a more afforable payment and to avoid foreclosure but it must happen before entering foreclosure.
Life After Foreclosure
If you recently, or have at one point, experienced foreclosure, you won't be able to recover right away. With or without a real estate attorney, you can take steps to help you and your family move forward to homeownership by revitalizing your credit and buying another home in the future.
After a foreclosure your main priority is to find a new place to live. Whether that is with friends and family, or finding a temporary place to rent while you recover from the foreclosure. If you need help you can reach out to the U.S. Department of Housing and Urban Development's Office, and they will provide you with housing counseling.
Millions of Americans suffer from foreclosure. Some of my personal friends and family members have had foreclosures happen. If you have any questions on foreclosures or are considering selling your house, please let us know. We are here to help. Contact us today.
Ryan Fitzgerald
Hi there! Nice to 'meet' you and thanks for visiting our Raleigh Real Estate Blog! My name is Ryan Fitzgerald, and I'm a REALTOR® in Raleigh-Durham, NC, the owner of Raleigh Realty. I work alongside some of the best Realtors in Raleigh. You can find more of my real estate content on Forbes, Wall Street Journal, U.S. News and more. Realtor Magazine named me a top 30 under 30 Realtor in the country (it was a long time ago haha). Any way, that's enough about me. I'd love to learn more about you if you'd like to connect with me on Facebook and Instagram or connect with our team at Raleigh Realty. Looking forward to connecting!
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