One of the most heartbreaking things you may have to deal with is losing your home. There are many different things that can cause you to lose your home. You may not be able to make payments due to an illness, job loss, or you may need to move because of your job, and you cannot sell your home or afford to take the loss on your home. Many people who bought homes at the height of the market are having a difficult time recovering from purchasing a home, and may be paying too much or owe more than their home is currently worth.
If you find yourself in a situation where you can no longer make the payments on your home, or you have to move to another area you may have to let your home go, and take a hit on your credit. It can be difficult to deal with this, and it should be a last resort. Before you get to this point you should cut your spending to the bare minimum. This means you do not eat out, and you are on a tight grocery budget. You limit your spending and stop your gym memberships and other subscriptions to places. This way you know that you have done everything you can.
Throughout the process you should be in touch with your mortgage company. You can apply for mortgage relief. Some companies are willing negotiate the terms of the mortgage with you. They may be willing to reduce payments for a short period of time or work out a plan to help you get caught up on payments, but you must be in contact with them before they will do these things. Even being in contact you may end up going into foreclosure and losing your home.
Be as proactive as possible. If you realize that you can no longer afford your home, put it on the market right away. You may be surprised that you home sells quickly. You need to find a good real estate agent, and price the home competitively so that it sells. You should also price the home aggressively. This means you may take a loss on your down payment or the other money you put into your home. It will be easier to purchase a new home if you do not hurt your credit by foreclosing on the home, because you wanted to hold out for more money.
Contact your bank to see if they will be willing to negotiate a short sale with you. A short sale is when your bank allows you to sell your home for less than you owe. Some banks will write off the difference, while other banks will require you to pay back difference over time. Either way a short sale is a better option than a straight foreclosure, because it is not as bad on your credit report. A short sale may make it easier to purchase another home in the future.
When you stop making payments on your home completely, you will need to find a new place to live. The rent you pay on your new place will need to take priority over your old home. It can be difficult to realize that you are not making payments you owe, and many people struggle with this. You should contact your bank, and let them know that you can no longer make payments. You will need to turn in your key, and you will have to go through the foreclosure process, which can be lengthy and embarrassing. Once you stop making payments it can be difficult to catch up and recover. So only do it if it is your only option.