Mortgage Dictionary -> Foreclosure
If you've paid any attention to the housing market in both the United States and Canada over the past couple years, then you've probably noticed a term that appears a lot in the news: foreclosure. As you've probably heard, foreclosure is an extremely serious thing that affects millions of homeowners every year and is something that is still on the rise. As a homeowner, you should know everything you can know about this.
What is Foreclosure?
When you get a mortgage, you are given certain rights to the property by the lender. Though you do not own the home until you've completely paid for it, you do have a legal right to be there. However, if you default on the mortgage, then you open yourself up to foreclosure, which is the legal process of taking back this right. When foreclosure is completed, you have no right to the home.
What are the Implications of Foreclosure?
Foreclosure is nothing to scoff at-it is probably one of the most serious problems for homeowners, if not the most serious. When you have gone through foreclosure and are unable to meet the demands of the lender, the lender has the legal right to bar you from being on the property and does not give you back any of the money you've paid on the home. In other words, if your house gets foreclosed upon, you are left with nothing.
How Can I Avoid Foreclosure?
Luckily for homeowners, avoiding foreclosure is rather simple as long as they follow the guidelines below:
Always Make Payments On-Time. The one way you default on a loan is when you fail to make payments on time for at least a couple of months. Thus, the easy solution is to always make your payments on-time. This way, the lender has no legal right to foreclose on the home.
If You're Having Trouble, Communicate! Many lenders are more than happy to work through issues with their borrowers and payment. If you lose your job or have another circumstance that makes it difficult for you to pay on-time one month, call the lender and tell them that you need a little help. This alone can prevent foreclosure.