SW Florida Real Estate Insider- Avoiding Foreclosure

Tips on Avoiding Foreclosure


Are you living in what I consider southwest Florida- the Fort Myers- Bonita Springs- Estero- Naples areas? If so, I am sure you have either read or heard of the foreclosures that are in abundance.

Foreclosures occur for different reasons. Job loss, divorces, illnesses/ deaths, mortgage payment increases, are just a few of the reasons. The foreclosure is the end result of the borrower not being able to make their payments to the lender. When this happens, the lender "takes back" the property by foreclosing on it. The property is then "bank owned".

Foreclosures are not a pleasant experience on either side- the borrower loses their home and the bank adds a home to their REO list, which means it must be sold. (Lenders often say that they are in the business to lend money, not own real estate.)

So, how to avoid this?

First- stay aware of any changes in your financial situation. Has anything changed with your job? If hours have been cut, then less money is being brought home. This means that there is less money to pay bills- so the shortfall has to come from somewhere. The same goes for any situation where income is altered. Your income may have decreased because of an illness (which can also bring in additional bills.) What if you are divorced? Maybe the income has been cut in half. And what if your mortgage payments have gone up? Even with the same income, you have a problem, because now you have more monthly debt.

Second- Take immediate action to funnel more funds into the bill paying area of your life. Look at your "wants" and your "needs". Make sure you are using your money for things you need (think mortgage, food, electricity.) Be strict with yourself when you look at your "wants" and use leftover funds for that.

Third- If you find yourself in a situation where you cannot make the mortgage payments, you have options. You might be able to refinance. You might be able to negotiate with your lender and set up a payment plan. You might be able to sell your property and find a property to rent that has a monthly housing expense more in line with your income.

Above all else, don't be an ostrich! Sticking your head in the sand and ignoring the problem will not make it go away. It will only get worse unless you take action.

I am here to help in any way I can- my broker, Franziska Smith and I both have years of mortgage experience in addition to our real estate experience. We can be reached at 1-888-815-3999.