Tracking Your Spending and Avoiding Foreclosure

There is no question that owning a house is a huge responsibility, from paying the mortgage to knowing how much the property is worth, all the way to routine repair/maintenance and keeping track of the housing market.

First-time homeowners, often Millennials (born 1982-1995), are urged to review all the basics of homeownership and the housing market so that they can make better-informed decisions and avoid disaster. Taking out the wrong loan, or having poor credit or not consulting real estate agents, can lead to trouble. In the worst-case scenario, a homeowner of any age may face foreclosure, and this is something to be avoided if at all possible. It's not rare, either; the numbers show that every three months, some 250,000 American homes are foreclosed upon. Do not let this happen to you.

Your Health

Tips for avoiding financial problems and housing issues are many and varied, and you may be surprised how many obscure factors come into play. For example, during these winter months, you must invest in the health of yourself and your household to avoid the flu or another influenza. Get shots and other vaccinations to help prevent spreading or catching such illness, and make sure to use hand sanitizer as well as wiping down doorknobs and stairway handrails. The CDC has estimated that since the year 2010, nearly 710,000 flu-related hospitalizations have taken place, and around 56,000 people have died from it. Losing days of work due to the flu or facing hospital bills due to an illness can deal a serious blow to your finances. And if you are already falling behind on your mortgage or other loans, that could spell disaster. Be sure to also get enough sleep and keep that sleep schedule consistent, so you are properly energized at work and feel tired later in the evening rather than in the early afternoon. Eating well, such as plenty of whole grains and fruits and vegetables, can also help a great deal. Cooking wholesome meals for the family can be its reward, and is much cheaper than eating out or getting take-out too often.

The Value of Your Property

Are you going to sell your house soon or are you on the verge of foreclosure? It is certainly preferable to be in the former situation, but either way, you simply must know how much your property is worth. In many cases, you can also invest in remodeling and landscaping to boost that property's value further, and the costs of remodeling are partially reimbursed through the remodeling itself. For example, investing just 5% of the property's value in landscaping can yield an ROI (return on investment) as high as 150%. And that is just landscaping. The master bathroom and the kitchen are popular rooms for remodeling work, and they often yield an impressive ROI of 70-80%, which is quite efficient financially.

It may be a good idea to hire an expert who will look over your house and assess the entire property's value, based on the quality and type of materials present. Some houses are known to have steel roofs, and such roofs are a great investment since they last much longer than asphalt shingle roofs and tend to be tougher, too. Worldwide, 40% of steel production is done with recycled materials, and around 90% of all steel is recycled at some point. This even includes the steel roof over your head. But it's not just roofing; the windows and doors count too, and they have a real impact on the house's value. Old and shabby windows and doors are unsightly, cause leaks in air drafts, and are a security hazard since they are easy for burglars to force their way through. Homebuyers will not be impressed by such old hardware. But window and door remodeling crews can be hired to replace those old windows and doors with new, attractive ones that fit well in their frames. Energy Star windows are double-paned, meaning they leak very little warmth during winter and thus ease the strain on the house's heater.

The very location is also a factor to weigh in. There is a running joke in real estate that the top three factors are "location, location, location," and while that is not true, there is merit to this claim. A house may be worth more simply if its neighborhood is located near desirable features such as a highway, good schools and parks, shopping areas, and entertainment districts. Real estate agents may inform you about the selling power of your area when you put your house up on the market, or in a worst-case scenario if you have been foreclosed upon. If you cannot easily sell your house on the market, you may opt to sell it to a "we buy houses" company nearby, which will send an agent who assesses the property's value. Then, the company may offer some cash for the house right away.

Finances and Avoiding Foreclosure

If you are having trouble making mortgage payments, or if foreclosure seems imminent, be aware of some steps that you can take to avoid this situation, or at least be better prepared for it. Some homeowners may soon learn that if their house is foreclosed upon, and it is worth less than the outstanding mortgage, then they will lose their home and also owe the difference in value.

The first piece of advice is the simplest one, and the earliest one to take: be aware of and honest about the situation, and do not delay when it comes to facing that problem. Procrastination does nothing to pay the debt or appease the creditor, and time is not on your side. Putting off a solution too long may make it even more challenging to reinstate your loan or even keep the house. Now that you are ready to face debt head-on, contact your lender right away and be honest about the current situation. No, your lender is not waiting for an excuse to pounce on your property the moment you show financial weakness; don't expect an ambush. Rather, a lender would much rather you find a solution and resume making payments, and they may even offer some options and cooperate with you. To an extent, the situation is you and the lender teamed up against the debt, rather than you vs. the lender. Know who your allies are.

Such aid may come in the paper mail, and you are strongly urged to promptly open and read all mail that you receive related to your mortgage, the lender, your credit score, and the like. If you end up in court, saying "I forgot to open the mail" will not sway anyone. And this isn't the only relevant paperwork; if foreclosure is looming, look for and keep track of all of your loan documents, and be aware of what your lender might do in the near future (and what they won't). Foreclosure laws and time frames vary from state to state, so don't presume much of anything about what may come next. You can also reach out to the State Government Housing Office for more assistance and reference.

You can get further help from the U.S. Department of Housing and Urban Development (HUD), and professionals will help you review your options and sort out your finances. What's more, they may even represent you during negotiations with your lender. In the meantime, you can demonstrate to your lender that you plan to keep the house and try to reinstate your loan by making sacrifices such as selling jewelry or a car or asking another member of the household to get part-time work to help chip away at that debt. Nothing can be guaranteed here, but such actions may appease your lender, and they may be more confident about you and become more patient about the outstanding debt.

And on a final note, be very cautious about signing paperwork from a firm that offers to halt your foreclosure immediately and act on your behalf. Many of these offers are actually scams, and you are sure to lose your house if you fall for them. Carefully read any paperwork you see (from anyone) before signing it, and follow the advice of any attorneys that you have hired. You can also heed the advice of a trusted real estate professional or a housing counselor from HUD, and they may know on sight whether an offer is a scam. Be sure to listen to them, and remember: if it's too good to be true, then it probably is.