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Are you facing a foreclosure?

If yes, you need to act on it pretty quickly before things get out of your control and you end up loosing your home.

Remember, your lender will be getting a deficiency judgment if your home goes into foreclosure. This is for the difference between what you owed to the lender together with the attorney fees and the selling price of your home at auction.

But don’t worry. I have some very useful tips for you that are sure to tide you out of the crisis:

Make a budget: This is an essential step which will let you to visualize the amount you earn and spend. Keep in mind that this information has a crucial role to play if you wish to figure out a deal with your lender or even to file a petition to safeguard yourself from bankruptcy. Also, it will help you in slashing your expenses, where you think that’s necessary. In the statement you make, do not forget to underline the debts you owe (for example, unpaid bills of your credit cards).

Go all out to pay your loans: The home loan is your priority debt. You should never forget this. So, try everything to make sure that you are repaying your home loan every month. You must bear in your mind that even a month’s slip can be disastrous.

If you feel that your income is not enough to get you through, simply go for additional sources of earning. It can be a part-time job, selling items in eBay.com or even letting out your house on rent. You can even consider getting yourself enrolled in a credit program to get a respite from your credit card debts.

Try refinancing: This is a wonderful option if your loan hasn’t yet affected you in a negative way and you can still manage another loan at a reasonable rate. Refinancing or taking out a home equity loan can go a long way in solving your crisis. But you need to be very careful about this option, especially when you pay off your credit card debts. Remember, in case you fail to recover in time, you will be compelled to repay those debts which would have been waived in bankruptcy.

External help: Contact the Department of Housing and Urban Development, in case you fail to work out a payment arrangement with your lender. Remember, this department keeps a list of standard counseling agencies that may help you in saving your home. You must follow this route, if you have an FHA or VA loan.

Plus, you can also go for a legal help from any attorney who is an expert in bankruptcy matter and conversant with the foreclosure laws of your state

Search out a real estate investor: It can happen that you have no equity at home that can fetch you a loan at a decent rate. In that case, getting in touch with a real estate investor can be a smart strategy on your part. But, make sure, the investor you select is a reputed one. You should know that the real estate investor can make your lender agree to accept an amount which is less than what you actually owe and make an “under-selling” of your home.

But make sure that you have a written undertaking from the lender that you will no way be accountable for the deficiency, i.e. the difference between the amount you owed and what you actually paid. You also need to remember that your lender may report the “waived” amount as income to the IRS. In that case, you need to do some paperwork to convince the IRS of your insolvency. Else, you may have to pay taxes on that amount.

Never agree to any sales contract from someone who is not approved by your lender. In case you don’t get a professional to help you in selling, you can contact a real estate attorney, who can assess the terms of contract and also see you through with the paperwork.

This entry was posted on Saturday, May 31st, 2008 at 3:05 am and is filed under Business Tips, Credit Repair, Real Estate, Small Business, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.