Losing your home to foreclosure is never something you want to have to experience. Not only are you losing the roof over your head and possibly facing life on the streets, but you also are losing your investment. This is why it is essential that you take steps to avoid foreclosure.
The best way to avoid foreclosure is to make payments on time and in full. Doing so fulfills your obligation to your lender, thus giving them no reason to foreclose on your home. In fact your lender will see you as an optimal and ideal customer, which could be helpful in the future if you need to take out another loan for a vehicle, major home improvements or similar items.
If you are unable to make your payment on time or in full it is important that you immediately contact your lender. Ideally this should be done before you miss a payment. However, even if the payment date has passed you should still contact them to explain your financial situation. Doing so allows you to work out a payment schedule that is beneficial to both you and the lender. Lenders want your money. They don't want you to default on your loan and force them to foreclose your home since they actually lose money when this occurs. Therefore they are more receptive to working with you to arrange payments until you are financially back on your feet. This could include suspending payments for a short time period or refinancing your mortgage by extending it and creating lower monthly payments.
Of course when discussing your financial situation with your lender it is important that you are honest with them. If they offer a payment solution that you can't realistically afford and maintain, then be honest and tell them. They will be more willing to work with you initially then when you have missed a payment through an arranged program.
Contacting your lender and explaining that you don't have enough money to pay your monthly mortgage can be emotionally hard and humbling. If you can't bear to do this then consider extra ways that you can bring in money to pay your mortgage every month and avoid foreclosure. Taking on a second job isn't fun, but it has the possibility to give you the extra money you need to make your payments. You can also cut back on expenses or sell old junk from around your home to make a few extra bucks.
As a last resort you do have the option of selling your home in order to avoid foreclosure. While this isn't the first thing that should do when facing foreclosure it is an option if you have tried everything else and still can't generate enough cash to keep your home. By you choosing to sell your home as opposed to the lender simply taking it away from you, there is the possibility that you can make a profit. For example, if you have paid half of your mortgage off and are facing foreclosure, you can sell it and most likely keep 30-40 percent of the profit of the sale. You can then use this money to purchase a home that is more financially manageable, or you can opt to rent. Regardless you avoid simply losing all of your investment because you couldn't pay.
Foreclosure can be a terrifying experience, but there are ways that you can avoid it. By taking certain steps when you miss a payment and working with your lender, you can keep a roof over your head while still protecting your investment.