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How to Prevent a Mortgage Foreclosure

By Sheryl Landrum
Mortgage Credit Problems Columnist


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If you are considering buying a home, or thinking of refinancing your current mortgage, these are some steps you can take to prevent the risk of your own mortgage foreclosure.

First of all, being realistic about what you can afford will help to avoid a home foreclosure. In the past few years, many borrowers simply bought homes they could not afford, which is one of the biggest reasons we are seeing such a high foreclosure rate today. Before taking on a home loan, sit down with a reputable loan officer to determine what you can reasonably afford.

Avoiding risky home loans will help you to avoid a mortgage foreclosure. When planning for your mortgage payment budget, make sure you are looking at a mortgage program you can live with. Many borrowers opted for programs that were short term in nature and started with a lower adjustable interest rate banking on keeping the home, or the original loan, for only a short period of time. As the housing market changed, and mortgage foreclosures began lowering home values, many of these borrowers were unable to sell or refinance their homes adding to the foreclosure problem. When looking to borrow, make sure your mortgage plan is flexible enough to deal with a changed market.

Impounds for taxes and insurance can also help you to avoid foreclosure. Another area feeding home foreclosures is that borrowers opted not to include payments for taxes and insurance in their mortgage payments. When these bills became due, many struggling homeowners were not able to make them and had to opt for foreclosure instead.

If you are in trouble, talk to your lender; usually they will work toward preventing a foreclosure. If you are thinking of a home mortgage, hopefully these tips will help you to avoid a future mortgage foreclosure.

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