Steps To Avoid Foreclosure Of Your Property

It is a gigantic set back when your property gets foreclosed when you are unable to pay back mortgages that you took on your home. It will take you a lot of time to bounce back both economically and mentally to a better situation.

This is the reason why you must try your best to avoid such situation. The previous year 2.58% of the homes sold were foreclosed property in Illinois, giving the state the country’s fifth highest foreclosure rate. Surely you can understand that this is a situation that many people are facing and many people are not being able to cope with it.

If you don’t want your property to be sold like the foreclosed property in Illinois then you will need to be careful and try to maintain as much proper credit as possible. And to maintain proper credit means to be remain eligible for mortgages. So here are a few things you should remember while securing mortgages.

1. Keep current mortgages going: You are trying to buy or refinance your home. One of the first things you want your lender to see is responsible payment patterns in your current situation. If you are planning on closing in the middle of the month or have given notice, continue paying rent until you have signed your final loan documents. Just be safe and prevent any blunders.
2. Be current on all accounts: Find out about everything from student loans, credit cards etc. and clear any outstanding quickly. Nothing can spoil your credit like missed or late payments. Be sure to keep an eye out for this as this is a place where people make the most mistakes. In fact many of the foreclosed homes in Illinois were due to late or missed payments.
3. Stall major purchases: This is a really important point. Try avoiding major purchases such as car, boat, or big-screen TV as much as possible. This will only get you more trouble. Always wait until loans are closed before making such large expenses.
4. Avoid buying furniture as well: Furnishing the home is always the next step. But don’t get into buying furniture just yet. Buying furniture is going to be a major expense and as per our previous discussion you should wait till your loans are paid. This point needed pointing out because it causes the most trouble to first time buyers.
5. Credit cards: Now this is something that you need to know about well because this is something that can swing anyway. You need to take care that till the mortgages are cleared you do not open a new credit card account, nor do you close any credit card accounts that you already have. Opening the account will add additional inquiry on your credit score and will change the mix of credit types in your report. Closing any credit card accounts can have negative impact on your score as well because it will be reducing your current capacity which will account for 30% of your credit score.
6. Cell phone accounts: Cell phone accounts pull credit when you open a new account. If you are just borderline credit-wise then it can affect you enough to increase your rate or cause denial.

Balance credit and maybe you can prevent your properties from suffering a fate like the foreclosures in Illinois.

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Created on Dec 31st 1969 18:00. Viewed 0 times.

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