The best way to avoid foreclosure is to stay on top of your mortgage and loan repayments, but there are several other steps you can take to protect your home and credit rating.
With the majority of America living paycheck to paycheck and all of the high risk mortgage loans that have been originated over the past couple of years, it is no wonder why the foreclosure rates are at all time highs right now. There are steps that you can do though to prevent yourself from becoming a statistic and increasing the foreclosure rate. The most important thing to do is to make sure that you are putting some money away into an investment account, a savings account, mutual funds, retirement accounts, or any combination of these accounts or other accounts. By having a little money put away, even if it is in a retirement account, you will always have something to fall back on if you are ever forced into some "hard times". This way if you ever have to experience a loss of job, unexpected expenses, or some other financial burden by having some money vested somewhere you can always tap into that to make sure you do not fall behind on your mortgage, even if "tapping" into this money means you will be penalized (such as "tapping a 401k account). This is one of the most preventative ways to help keep you and your family out of foreclosure.
Preventing foreclosure is something which requires discipline. If you are in a position where you have to choose between making a mortgage payment or another loan or credit card payment, you should always try to make the mortgage payment your first priority. Late payments to mortgage companies have the worst impact on your consumer credit of most major account types, and furthermore your ability to refinance will be significantly hampered by even one late mortgage payment. If you experience a significant change in your financial situation, immediately contact a mortgage advisor to discuss refinancing before you miss that first payment. You may need to think about obtaining a mortgage which allows you to make lower, minimum payments for a short period of time, to give you some breathing room until you get back on your feet. Preventing foreclosure by planning ahead of even your first late mortgage payment may save you tens of thousands of dollars over the years by protecting your credit, and in some cases may save your home entirely.
