Are you facing the possibility of foreclosure? The last thing homeowners want to do during this stressful time is make errors that could make the situation even worse. So what should you avoid and how can you make smart moves instead? Here are four key things not to do.
1. Don’t Ignore the Problem
First and foremost, you shouldn’t ignore a growing problem in regard to making mortgage payments. In this case, the worst thing you can often do is to do nothing. If you do ignore the problem, it can become unmanageable fast due to a growing backlog, rising fees, and interest increases.
On the other hand, if you take actions — such as to proactively talk to the lender — when you first know you’ll miss a payment or two, you’ll have more success than if you wait until they’ve already started court action.
2. Don’t Limit Your Options
Foreclosure is a distressing idea, and you may feel that you have no way to avoid it. However, you do still have options right up to the point when — and even after — a foreclosure is filed. The most important step is to learn about these options and consider them seriously.
As you talk with legal and financial professionals, don’t dismiss out of hand any options that may come up. This includes both keeping the home and giving it up.
For example, if you fight to keep a home you can’t realistically afford, this could just kick the problem down the road. On the other hand, it may be better for your long-term finances to seek Chapter 13 (repayment) bankruptcy and keep the equity you’ve built up.
3. Don’t Use the Wrong Money
When a homeowner wants to save their property, they may tap into sources of money and credit that they shouldn’t. One of the best examples is using retirement account funds. You will pay extra taxes and penalties for early withdrawal. In addition, these accounts are usually exempt from seizure if you later choose bankruptcy. By using this money to stave off foreclosure, you may do more damage than good.
4. Don’t Go It Alone
There comes a point when a homeowner should seek professional, legal assistance to keep their home. An attorney versed in foreclosure matters knows the best options for debtors in various financial situations. They can help you investigate things like refinancing or modifying loans, seeking a short sale, offering in lieu of options to the lender, and even filing for bankruptcy stays.
Where to Start
Avoid any of these or other mistakes by meeting with an attorney in your state as soon as possible. Wiesner & Frackowiak, LC, has aided homeowners throughout Kansas and Missouri for more than two decades. And our team can help you too. Call today for a free phone consultation, and we will assist you with finding the answers you need.