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Check Your Credit Report

Becoming familiar with your credit report is an important part of financial fitness at all stages in life. But it's especially important when you're ready to buy a house. The better your credit rating, the better interest rate you're likely to get. So while you're taking the time to save money for a down payment, take some time to get your credit report in order.

If you have poor debt ratios, meaning too much debt compared to your income, start paying down your debt. That's not an easy thing to do. But it's crucial in repairing your credit and getting favorable interest rates.

Hope Facing Foreclosure

The possibility of losing a home is a difficult ordeal that no one ever wants to face. If your credit card debt is unmanageable or you’re beginning to use credit for basics like groceries, this may be a sign that your finances are in trouble. Is it becoming more difficult to pay all of your monthly bills on time? It is time to seek assistance.

Consider these important points when looking at your financial future, particularly when it involves your mortgage. These efforts will demonstrate to your lender that you are willing to work and make sacrifices in order to keep your home.

  • Where can you cut spending on optional expenses?
  • Delay payments on credit cards or other unsecured debt until you make your mortgage payment?
  • Do you own assets that can be sold to mitigate your financial difficulty?
  • Can someone in your household get a second job to help with paying expenses?

Tips for avoiding foreclosure:

Contact your lender or loan servicer. It may be surprising to know that close to 50% of consumers who miss a mortgage payment or default on their mortgage never contact their lender. Lenders are there to assist you – and want you to keep your home. They can discuss options to help you work through payments during difficult times. Be honest with your lender about your financial circumstances and let them help you.

Gather information. Learn all you can about your mortgage rights and foreclosure laws in Florida. Review your loan documents to determine what your lender can do in the event that you cannot make your payments. Foreclosure prevention information sessions are offered throughout the state. Check for local presentations at www.freddiemac.com

Contact a nonprofit housing counselor. Help and information is available to you free of charge. The HOPE NOW alliance provides a 24-hour hotline to provide mortgage counseling assistance in multiple languages - 1-888-995-HOPE. You may also obtain a list of HUD-approved counseling services in Florida at www.hud.gov.

Alternatives to Foreclosure. When you are working with a lender or approved housing counselor to keep your home, there are options especially if your financial hardship appears to be short-term. See www.freddiemac.com for more detailed definitions of these options:

Refinance You may be able to secure a lower interest rate than your current mortgage and lower monthly payments.
Forbearance If your financial hardship is short-term, your lender may offer temporarily reduced or suspended mortgage payments for up to six months.
Reinstatement It may be possible to make your loan current and avoid foreclosure if you can repay the missed payments along with associated fees and late charges. Reinstatement is often combined with forbearance when you can show that funds will be available in the near future.
Repayment Plan This option allows the consumer to make up missed payments and late fees over a fixed amount of time and combines the past-due portion with the regular mortgage payment so that at the end of the repayment period, your mortgage is again current.
Modification You may be able to reach an agreement with your mortgage company to change one or more of the original terms of your note in order to make your monthly payments more manageable.

Stay away from companies that promise to help you avoid foreclosure. These for-profit companies are in business to make money and will most likely charge hefty fees for their services. Some may even appear to be affiliated with your lender. Remember that you can receive the same assistance for free directly from your lender or HUD-approved housing counselor.

Do not be scammed! A business or individual may offer to “stop foreclosure immediately” if you sign a document authorizing them to act on your behalf. Don’t do it! This indeed may be a trick to get you to sign over the title to your home.

Source: Florida Office of Attorney General website at www.myfloridalegal.com & Freddie Mac at www.freddiemac.com.