Filing Bankruptcy to Stop Foreclosure?

Some homeowners facing foreclosure are considering filing bankruptcy. Even though this might be an option for some people, there are a lot of other things you should try before filing bankruptcy to stop foreclosure.

The first thing you need to do is contact your mortgage lender. The sooner you do this the better. It's best to contact your lender as soon as you realize you might miss a payment. not after you've already missed one or two. Then your mortgage lender will be more likely to negotiate other options with you so you will not have to consider filing for bankruptcy.

Some of the possibilities you can try to negotiate with your lender would be reinstatement, forbearance, or a repayment plan, all of which are options if your money problems are temporary. If your money problems are not temporary, before you can try to negotiate with your lender to get a mortgage modification or a partial claim.

If none of these solutions will work for you and you won't be able to keep your home, before filing bankruptcy to stop foreclosure you should try to sell your home, or see if the mortgage company will allow assumption, a pre-foreclosure sale or short sale, or the deed-in-lieu of foreclosure.

All of these options require you to work with your current mortgage lender. If your mortgage lender is not willing to negotiate with you, you can try calling a HUD approved foreclosure counseling agency to get some assistance going over your options. These are usually free.

If at all possible you should avoid filing for bankruptcy as this will impact your credit rating and make things difficult for you in the future. Filing bankruptcy to prevent foreclosure is also not an option for everyone, and not all types of bankruptcies actually stop foreclosure.

A Chapter 13 Bankruptcy can stop foreclosure, so if you are thinking of filing bankruptcy, you should check to see if you quality for this type of bankruptcy, as not everyone does.

Be advised that filing bankruptcy to stop foreclosure won't mean you no longer have to make any payments on your house. A part of Chapter 13 Bankruptcy is a payment plan to pay off at least part of the money you owe to creditors such as your mortgage lender.

Remember, don't wait until you've already missed a payment or two before talking to your mortgage lender. Do it early!

Finding Money to Save

Trying to figure out ways to offset all the things you have to pay more for than you used to, but your paycheck is just not keeping pace?

Saving an extra couple of hundred dollars each month is easier than you think if you follow some of the ideas from Money Talks editor Stacy Johnson in this short (1:43) video…

What do you think? Any other ideas you've come up with to save a few dollars each month? Share them with us… we'd love to hear from you. Just click the comment link below and sound off. Your email, although needed to post a comment, will never be published here to protect your privacy.

Winter Heating Bills Could Soar

Home heating bills are expected to soar this winter and Americans, already struggling with high gas and food prices, are bracing for more financial hardship.

On average, consumers are expected to pay $1,182 to heat their homes this year, up 20% from last year, according to recent estimates from the Energy Information Administration (EIA).

While consumers may have some leeway in how they manage their heating bills and can take steps to make their homes more energy efficient, most experts say there is little we can do to escape higher energy prices.

More than half of America's households use natural gas for heating purposes. The Northeast has the largest concentration of home heating oil users in the country. And the prospect of a 31% increase in the price of heating oil has the region on edge.

Many Northeasterners try to get a jump on heating oil prices by filling their tanks during the late summer and fall months when prices are typically lower. But this year's run-up in crude prices has altered the usual seasonal pattern, and filling up now COULD actually cost more than waiting if crude oil prices continue to tumble as they have recently. Pre-buying is not the slam dunk it used to be.

One way that may be more managable is by going the "Level Payment Plan" route. This type of plan allows consumers to spread heating costs out over a longer period of time at a fixed monthly rate, which is based on the customer's billing history. At the end of the year, however, if the consumer has used more or less than what is covered by the monthly payments, the bill is adjusted accordingly.

Housing Upgrades That Don't Pay

Before you dive into a major renovation project to give a house your special signature, consider how long you're likely to stay in the house.

A lot of people get into trouble by going into a home they're only going to be in for a relatively short period of time, and they start doing renovations and additions that are sort of on their fantasy list, but they're not going to be there long enough to really enjoy.

Here are four reasons to proceed with caution, particularly if you want to maximize your chances of a profitable resale later on.

1. High maintenance - If your upgrade requires too much upkeep, buyers may view it as more of a nuisance than an asset. A prime example is an in-ground swimming pool, which can cost a small fortune to install, secure, heat and clean.

2. Overdressed - Luxurious amenities can be a good selling point, but only if they blend in with rather than outshine what the neighbors have. Having the nicest home in the neighborhood can be a bad thing when it's time to sell. A prime example would be upgrading the kitchen in an entry leval home to reflect remodeling from high-end home magazines.

3. Too Personal - Making a "Cookie-Cutter House" in the image of your own exquisite taste. Any time you deviate, no matter what the improvement is, from what is a fairly traditional, single-family house, you run the risk of improving in a fashion that will not lend itself to additional dollars at re-sale time.

4. Unpopular - If no one else on the block has a room like the one you're adding, or all the other houses boast the very feature you're getting rid of, watch out. For example, although converting your garage into an office, bedroom or playroom can be a less expensive way to add square footage and create more living space, it can have drawbacks. Potential homebuyers might miss the sheltered parking more than they welcome the additional room, especially if other homes in the neighborhood have garages.

This final tip for whatever type of home renovation you may be considering: Before you do anything in a house, live in it for a while. Prioritize what needs to be done, then go back a year later and see how much your list has changed.

If you have comments or questions about this article on housing upgrades that don't pay, use the comment link below to sound off. Your privacy will be protected, as we never publish anyone's email address on this blog. We welcome your comments.

Home Buying Techniques

Buying a home is an exciting and important life event. Being a first time home buyer means that you will have many decisions to make — and just as many questions that need answering.

Buying your first home is a huge step. These helpful home buying tips may reduce confusion about mortgage payments and the cost of buying a house:

• Get preapproved - Buyers should always get preapproved before they begin house hunting. Buyers should get a written preapproval from a reputable mortgage lender before they start shopping for a home.
• Calculate your mortgage payments - Buyer's mortgage payments might be the same or less than rent payments. The (principal and interest) monthly payment on a $200,000, 30-year, fixed rate mortgage with an interest rate of six percent (6.25%) is $1,231 — less than what some people pay for rent (taxes, insurance and any other fees, including closing costs, are extra).
• Share closing costs - Buyers may ask sellers to pay for closing costs. As part of the negotiating process when buying a house, the buyer may ask the seller to pay for a percentage of the non-recurring closing costs, sometimes saving thousands of dollars for the buyer.

Also ask yourself, "Is it cheaper to rent than to own?"

Here's a useful way to calculate and compare: Take the price of the type of home you want in your market. Now see how much it would cost annually to rent a similar property in the same area. For example, if you can purchase a home for $540,000 but can rent a similar one for $36,000 a year, your so-called price-to-rent ratio would be 15.

In general, buying starts to look attractive when the P/R ratio is around 15 or lower. (The current national average is 12.5.) As your market's P/R ratio falls, more sellers are likely to come into the market. So demand could pick up and help stabilize home prices.

Of course, 15 is just a ball park. While P/R ratios in many markets have come down lately, they're still high relative to their long-term average.

If you have any questions or comments, please use the comment link below and we'll respond to your question as quickly as possible. Your email address will never be published here for your privacy and protection.