A red background with Scrabble letter pieces on it spelling "FORECLOSURE" broken into three lines.

How to Avoid Foreclosure in Milwaukee: 7 Effective Strategies

How to Avoid Foreclosure in Milwaukee: 7 Effective Strategies 

An impending foreclosure is an extremely stressful and downright frightening experience for any homeowner in Milwaukee. But with proper strategic planning and proactive steps, you can avoid potentially losing your home and harming your credit rating. In this brief article we will discuss essential steps you can take to help avoid foreclosure.

1. Secure Your Financial Stability

Maintaining a stable financial foundation is the number one way to avoid the risk of foreclosure. To maintain financial stability, create a detailed budget that outlines your monthly income and expenses. Give expenses such as mortgage payments, utilities, and groceries priority over other less essential expenses. By meticulously managing your finances, you can allocate resources where they’re needed most—such as your mortgage payments—and thus avoid defaulting.

2. Open Communication with Lenders

It’s critically important to communicate with your lender as soon as you start having financial difficulties. Lenders understand that life circumstances can change unexpectedly, making it harder to pay your bills. It is likely your lender will recommend some sort of temporary solution, such as a loan modification or forbearance.

3. Explore Refinancing Options

Refinancing your mortgage can help prevent foreclosure. If you’re eligible for a lower interest rate, you can reduce your monthly mortgage payments. Consult with a financial advisor and research refinancing programs to determine the best options for your situation.

4. Seek Financial Counseling

Seeking the guidance of a professional financial counselor can give you valuable insight when dealing with the risk of foreclosure. These experts can analyze your financial situation and help you develop a personalized plan. They can also negotiate with lenders on your behalf. You will get a clearer perspective on options that are available to you so you can make an informed decision.

5. Consider a Short Sale

If your mortgage balance is greater than the current value of your home, a short sale might be a viable option. A short sale allows you to sell your property at an agreed-upon price to your lender to settle your debt. By doing this you will avoid harming your credit rating and other negative consequences associated with foreclosure.

6. Utilize Government Assistance Programs

Milwaukee homeowners can take advantage of government assistance programs designed to aid those at risk of foreclosure. The Milwaukee County Mortgage Assistance Program helps in foreclosure prevention by providing emergency assistance in the form of a grants.

7. Sell Your Home to an Investor

If you’re simply unable to continue making mortgage payments, selling your home quickly—before your lender initiates the foreclosure process—is a reliable way to prevent foreclosure. Real estate investors are uniquely qualified to help sellers in these types of situations because they can buy houses in “as is” condition and close fast, since they have the funds in the bank and don’t need a third-party lender.

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