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4 Benefits of Facing Foreclosure


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TERMINOLOGY

Facing a foreclosure can be one of the most stressful times in your life. The thought of losing the home that you have worked so hard to keep can be kind of surreal. You might be facing this situation and do not know what to do. While the foreclosure process is obviously thought of as negative, there are actually some benefits that can be found with it. Here are four main benefits of facing foreclosure:

  1. Saving Money: Once you realize that your house is going into foreclosure, you can start saving money. There's no point in making your mortgage payment anymore. You are too far behind to make a difference so you might as well put that money into savings. This way when you get out of the house and are looking for a new place to live, you will have some money for a fresh start.
  2. Negotiations: One overlooked benefit of foreclosure is the ability to negotiate the terms of your loan. You've been stuck in this loan for a number of years and would love a lower monthly payment. Up to a certain point in the foreclosure process, the bank is still willing to work with you. They might be willing to negotiate a loan modification for you. They may lower the interest rate, waive back payments, or alter other terms for you. You can't really negotiate the loan unless you are facing foreclosure, so if you are in this situation, you might as well take advantage of it.
  3. Fresh Start: Foreclosing on a house is the end of one chapter in your life and the beginning of another. You will remove a huge burden that has been on your shoulders for a long time. Many times a foreclosed house is one that you could not sell and could not afford. Giving it back to the bank will allow you to find a place that you can afford and still enjoy living in. You won't be able to buy a house for a while, but you can still find some great places to live.
  4. Valuable Lessons: If you treat the foreclosure as a learning process, you can come away with some very valuable lessons learned. You made some poor decisions during the time period leading up to your foreclosure, but you know that now. Therefore, you can learn from the mistakes made and not do them again. If you look back and see exactly what was done wrong, you will know exactly what not to do next time. With a foreclosure, you get a free course in money management. From this point on, you can focus on making the right choices with your money.