How To Face Foreclosure Financially And Emotionally
This article briefly explains what to expect if you face home foreclosure and details your some of your options. It also covers how to care for your emotional wellbeing through these difficult times. process.
Depending on your current financial situation, the amount of debt you are carrying on the mortgage, and the present and the future estimated value of your home, you may be able to modify the terms of your mortgage with your lender.
Mortgage Modifications Requires Negotiating Existing Terms
If you take this route, consider retaining a foreclosure defense lawyer to help you negotiate the modification and ensure you are protected to the fullest extent possible.
Issues To Consider Before Modifying Your Mortgage
- Is your property financially worth refinancing?
- Do you have enough equity to refinance?
- Is your money trouble genuinely temporary or likely long-term?
- If long-term, should you file for bankruptcy to obtain a fresh start and possibly save your home from foreclosure?
Two Threshold Questions
- What is the actual resale value of your home?
- Can you repay the loan under the current terms?
You must consider each of these issues carefully and honestly. If you determine that your home is worth saving financially, here are some options you should consider.
Options To Consider If You Decide To Keep Your Home
Borrow Money From Friends and Family
Many borrowers approach their parents, close friends, and even their children. Undoubtedly, seeking financial help from those you love and care for can be humiliating.
It is critically important to be absolutely honest with yourself and them by determining whether your financial difficulty is temporary or long-term. If your financial trouble is temporary, you may consider this option to get over the hump.
Asking For A Cosigner
If there is already a cosigner on the existing mortgage, it is wise to approach this person first since they have a vested interest in your financial situation. However, you must be completely candid with this person and realistic, specifically regarding how long you estimate it will take to repay the loan.
Refinance Your Current Loan
This option is the obvious alternative, and depending on when you purchased your home and the degree of equity that now remains, you may be able to temporarily solve your problem by simply refinancing your debt at a lower interest rate and for a longer term.
2023 Housing Carries So Much Volatility
Given the volatility of the housing market, you need to be prepared and have formulated your options before approaching others for help. It would help if you considered whether other creditors might place a lien on your existing home equity. If this is the case, be prepared to act quickly.
If you are fortunate to have equity in your home, be sure to compare lenders for the best deal but don’t delay if you believe a lien will soon encumber your property.
Consider Selling the House – Even At A Loss
After considering your options, you may be better off selling your house and avoiding the damage to your credit record that a foreclosure or bankruptcy will cause.
Be mindful that your home might be on the market for several months before you find a qualified buyer. Be realistic about the price and the terms of your offer as a seller. To sell quickly, you may need to offer your house for much less than you believe it is worth.
Remember, you are trying to avoid foreclosure and ruining your credit. Your best option might be to reach out to a local real estate agent who knows your local market and is experienced in these kinds of quick sales.
Be Mindful Of Your Emotional Wellness
Few things can make you feel more depressed and hopeless than the thought of losing your home to foreclosure. Your home is that one space that is your sanctuary, the place you go for comfort, healing, and protection. Your home is where you may have raised your children and for which you have precious memories made and safely stored.
Financial Trouble Is Temporary
Foreclosure is rarely isolated and often precipitated by other life-changing events such as job loss, injury, and divorce.
In times like this, it is essential to the emotional and mental wellbeing that you remember that money trouble is almost always temporary. Like everything else in life – it passes even though we may now feel there is no way out. Take stock of yourself and be sensitive to your well-being and that of your family.
Despair And Hopeless – Don’t Wait To Get Help
If you are stressed, anxious, and hopeless, don’t wait to seek help. Contact a healthcare professional to help you through these feelings.
Don’t Make Big Decisions While Emotional Distressed
If you and your spouse are discussing ending your marriage, take a deep breath and consider the consequences of such an action. It is rarely a good idea to make life-changing decisions in times of emotional and financial trouble. Instead, consider turning to an experienced marriage counselor or good friend to help you work through your challenges.
Managing Our Emotions Since The Pandemic
Going through financial hardship, marriage trouble, or both are emotionally overwhelming and are dangerous to your emotional and physical health.
As we move through 2023, so much is changing. So many pre-pandemic services have gone online, including mental and physical health professionals. People are reconsidering their priorities and careers, and many have chosen to become remote workers.
There is no longer the need to personally attend therapy sessions when you can schedule and attend an online appointment with a qualified professional over the Internet.
At the same time, new and powerful artificial intelligence applications like ChatGPT are rapidly integrated into our lives and are even changing how knowledge workers and others do business.
Stay Positive And Grounded
While these are stressful times, these are also times of incredible personal and professional opportunities for growth. More often than not, change challenges us to leave those familiar life patterns that have become so ingrained in us.
In times like these, reaching out for professional support can help – so can reaching out to your friends and family. You might be surprised how many people understand what you’re going through and will be very supportive of your situation.
