Purchasing a home in New Jersey is an exciting experience. Unfortunately, medical debt, loss of employment and other changes to a person’s financial status can lead to foreclosure. Many people facing a foreclosure may believe their banks are eager to evict them from their homes and seize the property. However, banks often stand to lose more from taking this route than trying to work something out with the homeowner. Because of this, if creditors are calling, it may be beneficial to take the call.
According to USA.gov, the first step when avoiding foreclosure is to communicate with the lender. In fact, it is better not to wait until they start calling. Be proactive if there is any reason to believe there may be some difficulty with making upcoming payments. This provides the opportunity for creditors to adjust payment terms, even temporarily. Some options on the table may include refinancing, forbearance, loan modification or a repayment plan.
The next step is to take advantage of services provided by the Making Home Affordable program. MHA offers free assistance to help homeowners to keep their home or safely give it up. There may also be a housing agency at the state level that may be able to help. For homes financed by an FHA loan, contacting the FHA National Servicing Center may also be helpful.
Additionally, Forbes recommends that homeowners educate themselves on the foreclosure process, especially in instances where losing their home may be inevitable. This may happen in instances where the homeowner is so buried in debt that they are certain they will not be able to make payments or come to a favorable settlement with the bank.
For homeowners who are concerned about protecting their credit history, a short sale may be beneficial. This would require permission from the lender as the bank may need to accept much less for the home than it is actually worth. The lender would also be in charge of deciding what offer to accept. While this ultimately means a person may lose their home, they may at least manage to escape the repercussions of foreclosure with no dings to their credit score so they may try again when they recover from their financial hardships.