Losing your home can be one of the worst financial events in a person’s life, but it happens every day. Here are some tips that can help you avoid foreclosure and keep your home.

Early action is vital. Very seldom does someone wake up to find that their home is in foreclosure. There are always warning signs that will precede the event. Being aware of these signs and taking corrective action early on can mean the difference between keeping your home or losing it.

As soon as you know you’re going to miss a mortgage payment, contact your lender. Contacting your lender early on allows them to assist you in getting help to work out alternatives. The truth is most banks don’t want to take your home. They don’t want the hassle of foreclosing, maintaining, and then trying to sell the home. They would rather some arrangement be worked out, but this often requires your early action and contacting them.

You should always follow up your phone call with a letter. You need to draft a hardship letter and send it to your lender. Don’t be too creative. Be specific about what caused your payment delinquency, make it detailed and be honest, but also be concise.

Don’t accept a short sale unless you have no other options. A short sale is when the bank or lender agrees to sell your home for less than what you owe. The difference between the selling price and the amount you owe will still need to be made up by you, and, of course, you will lose your home in the process.

You will find that being polite and patient with lenders will go a long way. There are many solutions a lender can offer you. These might include extending your repayment period, suspending payments for a few months, or tacking the missed payments onto the back end of the loan.

You may also want to talk about extending the contract with your lender. Lets say you have a 30-year fixed rate loan, perhaps you can change it to a 40-year loan. Not all lenders may be willing to do this, but it is certainly worth asking about. The difference in the payment amounts can be the difference between keeping the home and losing it.

Refinancing, in general, is also a common option but homeowners should understand that refinancing is much easier to get when the housing market is moving up and less easy to get when the market is moving downwards.

Another option for some homeowners is bankruptcy. This is an option that must be decided based on the advice of an attorney. Not all homeowners can find relief from the bankruptcy court. For this reason, you must speak with an experienced attorney who can fill you in on the details and whether or not your home can be protected.

Avoiding foreclosure is not always easy and it can be very stressful, but keep in mind that a foreclosure will remain on your credit record for seven years. It may be up to four years after a foreclosure that you will be approved for regular interest rates again. These are just a few of the reasons that you should work as hard as possible to avoid foreclosure.