Considering the foreclosure storm raging all around, the most important point is not to sigh and fear but to be alert about precautionary steps that can be taken against foreclosures. The target is to maintain the value of the house and to keep the ownership of it. This is the time to secure the nuts and bolts of personal finances to see that the foreclosure storm does not blow over the roof.
It is prudent to maintain the house well so that that instead of depreciating the value appreciates. Priority should be give to essential repairs to the roof, gutters and to fix and leaks before these worsen. The heating system needs to be updated and upgraded. According to a survey it is a tiptop kitchen that is most eye catching. For cosmetic appeal wooden decks and window needs attention.
Secondly if mortgage payments begin to get difficult it is time to seek modification of the loan from the bank without delay. Here time is the essential factor because delay will mean further piling up of debts. Borrowers need to be prepared for talks with two latest bank statements, pay slips, income tax return and letter detailing reasons for hardship.
The third point that needs attention if one is lucky enough to think about buying reo homes in these troubled days is to discuss minutely with a legal expert about the deed. There are many ways of protecting the individual if the building is purchased in the name of a firm or company. If the owner is in possession of the house for a long time it would be judicious to revisit the deed and find out under whose name it is. The lawyer might suggest the formation of an irrevocable trust that means it cannot be changed or altered no matter how many law suits are filed.
Another way of guarding against foreclosure is to opt for a life insurance. If the owner wants to continue to stay in the house and yet send the children to college from it then the life insurance agent is the best person to consult regarding pros and cons of term life as against permanent life insurance.
A fifth guard against foreclosure is the matter of disability. It can happen to anyone anytime. It is the reason behind half the foreclosures. Disability insurance will give the required protection.
A sixth warning is about personal guarantees – never to take more loans than one can handle.
Seventh is the eternal caution about always keeping something in the piggy bank for a rainy day when foreclosure clouds gather.
