Six Steps to Avoid Foreclosure

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Here are six steps to avoiding foreclosure from David Bach:

1. Call your lender immediately.

2. Ask to speak to the "loss mitigation" department.

3. Be prepared to review your situation in detail with your lender.

4. Know the ways your lender can help you avoid foreclosure.

5. Know where to turn if you aren't getting the help you need from your lender.

6. Be aware of the foreclosure process -- and consequences.

I realize that some people who go through foreclosure are victims of unforeseen circumstances -- an illness in the family, divorce, loss of job, etc. -- but in most cases, I think people face foreclosure simply because they bought a house they couldn't really afford. That's why my formula for buying a house recommends doing what millionaires do: buy a house they can easily afford.

The WRONG way to borrow is to let a bank tell you what you can afford to borrow and then go ahead and borrow as much as they'll loan you. Run the numbers yourself, plan your budget out as best you can for several years in the process, resist stretching to the breaking point and then decide for yourself what you can easily afford. If you take these actions, you won't need the six steps David recommends.

For more on real estate, see these posts:

• Save Money When Selling Your Home

• Should You Pay Off Your Home or Not?

• Five Steps to Get Your Home in Shape for Summer

• How to Eliminate Housing Costs

Comments

[Truth]

Hey this is off subject Im 18, and interested in investing, I have the small sum of 1400 to invest, I was thinking that index funds would be a good idea, but to be honest I dont really know where to start as far as getting to them, do I go to a bank, or do I purchase on line... I do quite a bit of reading and also keep up with this among other sites, but sometimes I just have a hard time understanding, and making actuall moves...Truth...

[FMF]

Go to Vanguard's site at www.vanguard.com and look at the options they make available for you. It's pretty simple to follow, though many funds will require more than $1,400 to start. But I believe you can sign up for automatic deposits and the amount limit is waived.