The best way to avoid foreclosure is not to get in over your head in the first place. The reason so many of the sub-prime mortgages turned into foreclosure properties is the borrowers could not afford the home in the first place. When the loans reset at higher rates and the borrower could not refinance the home because the price had declined and they had no equity or they could not sell the home for the same reasons, the home either went to short sale or foreclosure.

What to Do Before You Buy a Home
If you are thinking about buying a home, now is a great time because the interest rates are low and the home prices are affordable. However, if you cannot afford the monthly mortgage payment, insurance, taxes and maintenance fees, if any, then you may want to rent until you save up a larger down payment or your income increases.

Make a list of your assets, income and your debts and other expenses, leaving money for emergencies, and then you can see how much you can afford. Stick to your budget.

Being Responsible and Paying Your Debts on Time
Try and make a habit of paying your bills on time or early and avoid late fees and payments. It’s not a good idea to overspend. Don’t rely on your credit cards to pay your bills. If you get in the habit of staying on your budget and trying to save money as well, then you should be okay in case of a financial emergency. You should have at least 6 months of income saved in case of a job loss, wage reduction or illness or disability.

Of course, you never know what the future may bring, but being prepared can help save your home from foreclosure.

Communicate Early On With Your Lender
If you do get into an unexpected situation that is going to put you in a position that you will fall behind in your mortgage payments, contact your lender right away and discuss options you have.

Early communications can save your home from foreclosure. The lenders want to work with their borrowers. It costs them more money and time if they have to foreclosure on your home, which they don’t really want to do. There are options such as refinancing under the new Obama Home Affordable Modification Program and the Home Affordable Refinance Program
for homeowners who qualify.

Where to Get Help
You can get help by hiring a trusted mortgage modification company to help you negotiate a mortgage modification. Since the mortgage modification company has established relationships with lenders, it’s smart to have them negotiate your modification, and well worth their fee. Yes you could try and do it yourself, but most homeowners don’t have the experience or the time and patience to go through the process. In fact, they could end up wasting valuable time by not knowing who and how to apply for a mortgage modification.

You may also want to seek the advice of an attorney if the lender has already started foreclosure proceedings against you. The attorney and the mortgage modification company will be able to coordinate their efforts. If the lender has already filed a legal foreclosure action, the attorney is the only person who can defend you in a court action. The mortgage modification company can help negotiate the modification at the same time stopping the foreclosure action against you.

As always, thanks for reading this post and if you enjoyed it be sure to comment below. Also, check out our FREE 2009 Loan Modification Guide: Saving Your Home From Foreclosure.