Fusion 360
Owing more on a house than what its worth, or being “underwater”, is a precarious situation to be in. Borrowers can refinance, tighten their budget or sell the home at a loss. Should those options fall through, homeowners can face foreclosure.
Foreclosing on a home damages borrowers’ credit, negates all the equity invested and makes getting a future loan from mortgage companies much more difficult.
While boats, ATVs and the like are fun, losing a house takes precedence over recreational activities. If one is having a hard time making house payments, it doesn't make much sense to make payments on expensive toys.
It’s imperative for homeowners to keep up on mortgage payments. Keeping regular with payments before getting in too deep encourages mortgage companies to work with borrowers during their financial hardships.
On a similar note, it’s important to not avoid lenders calls or letters. They, too, want to avoid dealing with a foreclosure, so keeping an open line of communication is essential.
Once someone gets used to a certain standard of living, it’s hard going backward. As unpleasant as it may be, if the mortgage bills start stacking up, homeowners need to cut expenses where they can. This means avoiding eating out or taking the family to Disneyland that year.
Going through and selling various assets is another way homeowners can avoid foreclosure. One can sell the second car, real estate property or even hold a small garage sale.
Government agencies like the Housing and Urban Development can offer financial counseling to homeowners experiencing dire straits.
Mitchell Reber is a mortgage writer. Information provided by Castle and Cooke Mortgage (#1251). He writes for Fusion 360, an advertising agency in Utah. Find him on Google+
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