Many people are facing tough decisions in their finances these days. Economic experts are predicting that things will likely get worse before they get better. It is a scary thought when the bills start coming in with “late” stamped on them. The best thing to do to save your home and to save your credit rating is to start dealing with trouble before it becomes an issue.

Tips for Keeping Your Mortgage out of Foreclosure

1. Get your head out of the sand – the financial problems will not go away if you just ignore them. The sooner that you contact your lender with a potential problem then the more time you give both of you to come up with a solution that will help.

2. Get assistance – the government is trying to come up with ways to help homeowners that are struggling. Lenders are also developing programs for homeowners in good standing that are coming into tough times.

3. Call for a time out – many lenders will understand that temporary trouble happens. If you know that your financial trouble is only short term then you may be able to get a payment waiver from you lender for a couple of months.

4. Make the big cuts – it is better to cut all extra expenses, no matter how painful at the time, rather than to risk losing your home. Look at classes, trips, extra vehicles and other toys as the first place to cut.

Troubles happen and even lenders can understand that. You only compound any troubles if you try to ignore them. Deal with financial difficulties as soon as possible and you can find several ways to help keep your mortgage out of foreclosure.

1. Don’t build up debt. There is a difference between credit and debt. Credit is borrowing against money you have (like when you use a credit card to buy something that you have been saving for – the money is in your savings drawing interest while you put the purchase temporarily on your card). Debt is when you borrow money with no means of paying back the purchase (like when you run low on funds at the end of the month so you begin buying things on one of your many credit cards. The new month will not bring enough income to cover the purchases).

2. If you already have debt you can’t pay, call the creditors BEFORE your payments start being late. If you are up front with a company while your account is in good standing then that company is more inclined to work with you during your problem times.

3. Don’t make promises you can’t keep. If you aren’t going to have the payment at the end of the month, then don’t say you will. Be realistic in your promises. A lie now will only hurt you even more next month.

4. Seek financial counseling. There are people out there who make a living helping others get their finances under control. Some of them charge a fee, but some of them do it as a ministry. Look on line, look through the yellow pages, or call a local church to find someone who can help you find your way to debt freedom.

5. Stop buying now. If you are already in debt over your head then you don’t need to buy anything other than basic (food and a roof over your head) necessities. Cut every other spending that you might want to do. Get out of debt and make it a habit to stay that way.

6. Pay off highest interest loans first. Many systems recommend paying off the loan with the lowest balance. This is a good morale booster, but in the long run you will save more money by paying off the loans that have the highest interest.

7. Do consider a consolidation loan. If you have changed your spending habits and you have some equity in your home then you might look at remortgage to consolidate all the smaller debts into one loan that is a lower interest loan. Don’t borrow more than is needed to payoff the current debts. It can be tempting to get cash back for a spending spree – but it won’t help your situation in the end.

Getting into debt is easy. Credit card companies and other lenders send borrowing opportunities to everyone (even the family dog at times). Getting out of debt requires commitment, consistency, and sacrifice.

A debt free life will be a better one for you and your family now. It will also lay the foundation for a better life for you children.