Don’t lose your house
When you apply for a loan, your financial situation will be
thoroughly examined by your lender. Every nook and cranny of your
fiscal past will be carefully scrutinized. In some ways, your
lender is doing you a favor by doing all of this background checking;
if your credit is so poor that you can’t obtain a loan,
you probably wouldn’t have been in a position to make your
regular mortgage payments.
On occasion, even after the lender combed through the financial
history, a borrower will not be able to make their mortgage payments.
This usually happens for one of two reasons: the borrower wasn’t
ready to handle such a big responsibility, or some unforeseen
circumstances made repayment difficult or impossible.
In either case, severe delinquency (late payments, missed payments,
and so forth) will lead to foreclosure. Basically, that means
that ownership is lost and the house is sold to a new buyer.
There are a few ways that you can make sure that foreclosure
never happens to you. The first is preventative. Simply put, if
you think that you might have a hard time making your mortgage
payments, then just don’t get a mortgage. Waiting a few
years until you are in a better position to make the purchase
can spare you a lot of grief.
If, however, you are the victim of unforeseen circumstances,
then be upfront with your lender about whatever the problem is.
Usually, they’ll help you develop a revised mortgage payment
schedule that will help you catch up. You might have to cut back
on expenses for a while or even take a second job, but most people
would agree that those alternatives are preferable to foreclosure.