The dilemma of foreclosure is very real and surveys on home foreclosures are here to prove that. According to House Predictors 2007 survey, than one million homes were foreclosed this year and 2 million homes are expected to face foreclosure by 2009. Primary reason why homeowners face foreclosure is because of ballooning interest rates on adjustable-rate mortgages. If you just obtained a home loan or is planning on getting one, what can you do to avoid foreclosing your property?

Here are top ten tips:


1. Never delay or miss a payment. A home loan is a very serious debt. Some homeowners feel that missing a deadline once is okay but even a single pass on your monthly payment is a risky action. If you're really short on money and you won’t be able to make it on your due date, be sure to contact your lender right away and explain them why you'll be catching up on your payment.
 
 2. Don't hide from your lenders. Some people have the false notion that lenders are after their homes. The truth is, lenders prefer for their clients to pay them the cash rather than go through the foreclosure process. If you're experiencing financial crisis, talk with your lender and arrange a solution. Your lender would be happy to help you out if they can see your willingness to pay.
 
 3. Never ignore mails from your lender. If you've already missed 3 payments without contacting your lender, then your lender would be forced to take legal action against you. Again, don't let the situation come to the point where your lender will send you a notice of foreclosure. Talking with your lender is strongly recommended.
 
 4. Be aware of your rights and obligations. Review your mortgage contract and make sure that you do understand your rights and obligations as the homebuyer. Pay close attention to penalty clauses and the options available for you in case of missed payments.
 
 5. Seek help from the Department of Housing and Urban Development (HUD). This government agency offers assistance and counseling for people who are facing foreclosure.
 
 6. Check your lifestyle. If you're having difficulty in keeping up with your mortgage payments, then that's a red flag that you should start making some changes on your lifestyle or your spending habits. Find ways on how you can pay less on your utilities and spend less on your daily expenses so you can save the money to add to your home loan payment.
 
 7. Ask for a reinstatement. A home loan reinstatement is an option where you can pay your mortgage at a later time without getting penalized by your lender. Most lenders provide this option for their clients in order to avoid foreclosure.
 
 8. Watch out for home foreclosure scams. Facing the possibility of foreclosure can you make a vulnerable target to scammers who may promise to save your property or stop foreclosure just by signing up with them. NEVER sign any document without a reputable lawyer checking the terms and conditions for you.
 
 9. Choose your mortgage wisely. Home foreclosures are usually a result of unexpected increase in interest right in the middle of the loan term. Before signing up for a home loan, always think about the long-term effects of the loan. Be careful about adjustable-rate loans that start out with very tempting low rates that can soar unexpectedly. Examine the terms and conditions of your mortgage before binding yourself to a contract.
 
 10. Compare the APR, not the interest. The interest rate isn't the only cost you should be concerned about as some home loans with low interest come with high fees and charges. To compare loans more accurately, calculate the APR as this includes the interest rate, origination fees, processing fees, and other costs associated with your loan. However, take note that the APR is not a complete calculation of all fees in your loan. Be sure to ask your lender exactly what fees you would be paying before choosing your mortgage. Some foreclosures happen because the homeowner did not anticipate the high fees.

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