Foreclosure is the process a bank or mortgage company uses to take back ownership of real estate when the homeowner failed to comply with the mortgage agreement. Most often, that simply means that the homeowner is unable to keep up the payments. Here are 3 early warning signs of foreclosures you must know today so that you can quickly take actions to prevent foreclosure.
Loss of employment or income
The first early warning sign of foreclosures is the loss of your job. The loss of your job or reduction in the number of hours you usually work can impact negatively on your income. If you are facing either a loss of job or a reduction in your income, your financial condition will be affected and you may not be able to make timely payments of your mortgage on time.
Divorce or Death of a spouse
Divorce or death of a spouse can create serious difficulties if there were no plans in place to take care of the reduction in the finances. Once the source of income for the payment of bills, mortgage and other recurring bills begin to fall short, there is danger already. This is another early warning sign of foreclosure you must know.
Missed first payment
Another early warning sign of foreclosure is when you missed the first payment. While you miss one payment at first, it may not look like a serious issue at first, by the second month; you may have even more problems struggling to make up the payment you missed. It can get much more difficult to meet up once you default in the first payment.
Missed at least four payments
When you are unable to make at least four mortgage payments, this is the number one sign that your bank or mortgage company will be ready to foreclose on your home. If you are having no luck making any extra money, it can seem like a foregone conclusion that you will lose your home. However, there is light at the end of the tunnel.
Talk to a housing counselor immediately if you see any of these early warning signs of foreclosure. You may be able to get your finances back on track before foreclosure becomes a reality.