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Are you at Foreclosure Risk?

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By : Sonia Smith    99 or more times read
If there is a change in your financial situation and it is heading for the worse, you might be at risk for foreclosure. If your finances altered because of medical expenses, loss of job, increase of mortgage payments and other factors, there is a chance that you could be facing foreclosure risk. In this article, you will have an idea on how the process of foreclosure starts.

If you have missed payment on the first month, the mortgage lender will get in touch with you by phone or letter. For a missed payment on the second month, the lender will call you often and discuss your missed payment. It is of vital importance to talk with your lender and discuss the cause of the missed payments. For a third month payment missed, you will get numerous letters from the lender by certified mail and followed by a number of phone calls. The lender’s letter is called the Notice of Default, demanding an update of your mortgage. The letter also states clearly the delinquent amount owed. You have 120 days after receipt of letter before your property goes to foreclosure.

The timeline of the default letter differs on a case-to- case basis. If you are aware that your present situation falls somewhere in this timeline, there is still time to prevent foreclosure. If you are now facing foreclosure or worried about it in the future, there are several things you can do to avoid it such as talking to a foreclosure avoidance counsellor, discussing your situation with the mortgage lender and looking for local and state foreclosure resources.

In order to prevent foreclosure, the first step is to take into consideration the type of loan you have. If it is an adjustable mortgage, it would be better to get a fixed rate due to the volatile market these days. If you plan to refinance your home loan, apply only if the interest rate is lower than your original mortgage. Determine if the lender has bad business reports before you proceed on applying.

Bear in mind, do not rush into signing documents and never sign an unfinished contract. Take your time to read the document carefully and ask questions if you need some things clarified. The most important thing to keep in mind is the reason to refinance your home is to get money to pay your high bills and you should not use it for other things. Your aim is to keep all your accounts paid on time keep your account current and have extra money at month’s end for financial security.

Remember that a foreclosure affects everyone. You will be affected, your family, your work and the whole community. Know the effects of foreclosure and find a solution to help avoid it. Be aware of the effects of foreclosure and look for a solution to help avoid it so you can continue to live in your home. Remember, your home is one of your most precious investments, so make sure to protect it from foreclosure.

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