The foreclosure numbers continue to be terrifying. According to the MarketWatch article of September 12, 2009, Foreclosures could top 8 million: Credit Suisse, Credit Suisse projects that more than 8 million mortgages (8.1 million to be exact) will experience some form of foreclosure in the next four years. So, there seems to be no relief in sight, at least for a while.
And, when you combine this with the fact that many struggling homeowners don’t have the savings to get by; no equity in their homes to draw on; and bad credit that prevents them from getting any type of loan, leaves them in a financial bind.
So what exactly do you do when you have bad credit, no home equity, and no savings? Here are some concrete tips on how to recover financially.
Foreclosure Tips: Should You Try to Stay in Your Home?
Because foreclosure is as much an emotional as a financial process, it can be difficult to make the right decisions. But, in order to get yourself out of this mess, you need to somehow take the emotion out of the process and consider the pros and cons of trying to hold on to your home.
Foreclosure Tips: When Foreclosure Is a Blessing in Disguise
Because “losing” your home may be the best thing that can happen to you, in the long run. It’s all in how you look at it. Consider this, if you don’t qualify for a mortgage modification; they are underwater and cannot refinance; and have bad credit, you may need to seriously consider putting your home in foreclosure. Or try to sell it in a short sale or do a deed in lieu of foreclosure.
Without this financial ballast around your neck, you’ll be able to start over. With a lesson learned, hopefully you will make better decisions in the future.
Foreclosure tips for those who want to keep their home
If you have bad credit, no equity and no money, then your best bet is a mortgage modification. Why? Because your lender is the party that has the most to lose if you leave your home. And, with bad credit, no other institution will give you a loan, so that’s out of the question.
If you do not have savings, you cannot get out of a hole, that is, pay arrears or buy something cheaper.
And, without a home equity, you can’t refinance, so that’s not an option.
So again, your only real option is to try to settle with your current mortgagee. There are government programs set up to help homeowners stop foreclosure. But again, if you find out you’re not eligible, your best bet is to harass your existing lender into giving you a mortgage modification, etc.
The best foreclosure advice is probably this: The only way to get out of a difficult situation like a home foreclosure is to face the facts. The sooner you do this, the sooner you can make some concrete decisions and move on with your life.