Avoiding foreclosure
All the foreclosures in the news got me to wondering — how can people avoid foreclosure if they get into financial difficulty? I don’t have any direct experience with this myself, but I do know that probably the most important thing people can do is talk to their lender early on. I was once two month’s late on my mortgage payment, and the best thing I did was respond immediately to the mortgage company when they contacted me about it. (In retrospect, I should have called them up front and explained my cash flow problem instead of waiting for them to contact me.) Just those two months of late payments cost me money down the road when I went to get another loan — I had to pay a higher interest rate because of it, and that was the only negative on my credit, ever. Having a foreclosure on a credit report can affect you for many years, so avoid it if possible. Here are two resources that can help:
Tips for Avoiding Foreclosure – HUD
You Can Avoid Foreclosure and Keep Your Home – FHA
(The FHA site also has some specialized information on it that relates to members of the military, who are sometimes eligible for interest rate reductions.)
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