Every state sets up regulations, guidelines and supports for its citizens relating to mortgages and other financial issues. In the city of Buffalo, New York, there are consumers struggling to fulfill mortgage payments on a monthly basis. They could face foreclosure, but these individuals and couples should take the following steps before submitting to this fate or trying to file for bankruptcy, either of which would look very bad on one’s long-term credit history.
Talk to a Counselor
Non-profit organizations in Buffalo want you to avoid foreclosure because it is distressing and might even be unnecessary. There could be a program or some emergency financial support available.
For example, if loan repayments are taking a back seat to emergency medical bills or feeding children, certain organizations might provide money for essentials. Counselors are also trained to help home owners reorganize their finances. Perhaps budgeting is an issue in which case mortgage money is available if strict economizing takes place. Loan consolidation could be the answer.
When there really isn’t any more money, counselors help home owners talk to lenders and there is also free legal support if they qualify. Consumers go through an application process, so the city helps the neediest candidates first.
Talk to the Lender
Even your mortgage lender wants clients to avoid foreclosure. This institution wants its money back and the best way to achieve their goal is to negotiate terms. One option they might consider is to reduce your interest rate. Another is lengthening the period over which you pay. Thirdly, it’s possible they would cut away some of the principal loan. They will only negotiate these terms if a candidate appears likely to make reduced repayments faithfully so, once more, there is a vetting process.
This is only possible if you have owned your house long enough to have established equity. Release the difference between your home’s market value and the price you paid for it as leverage against which to borrow further funds as a lump sum or a line of credit. Use these funds to pay off some of your debt, reduce monthly installments, and to extend the period of your loan so as to avoid foreclosure. During refinancing you might also discover that lower interest rates are available which bring down monthly fees anyway. You might be able to afford your mortgage after all.
Sell Your Home
Again, an increase in the value of your home (equity) means you could sell, downsize, and continue making repayments on time. You can still upgrade in the future if your fortunes changes. If selling is not an option because of reverse equity, the lender might be talked into renting the home to its current occupants at a lower rate (comparable to a lower property value). There is always the risk, however, that they will rent for now and sell if a buyer comes along. One can hope during this time that better employment will come along so renters can become owners once more and not face the loss of money they have been investing in home ownership for several years.