Question

Which one of these is the best way to prevent foreclosure?

1. Save at least 1% of your home's purchase price annually.
2. Refinance as soon as possible
3. Use a budget to live within your means and build savings
4. Never accept an adjustable-rate mortgage

Answer 1

3. Use a budget to live within your means and build savings

This is always the best option to prevent financial problems like a foreclosure. Budgeting your expenses according to your income, and building savings should prevent any person from defaulting on his or her mortgage payments.

However, in less ideal situations, if a foreclosure can be reasonably projected in the future, the best option to prevent it is to 2. Refinance as soon as possible