Tips to Avoiding Foreclosure
Homeownership provides a sense of
security. It is something that is achieved after years of hard work
and sacrifice. There is security in homeownership. Sometimes life events such as a loss in income can threaten that security and
lead the homeowner toward foreclosure. There are steps a homeowner
can take to avoid foreclosure.
If you are one of millions
of homeowners who financed their home with an adjustable rate bad credit mortgage, you may already be feeling
the pain of the higher payment. If so, now is the time to consider
a mortgage refinance. Even if you are behind a payment, you may
still qualify for a lower fixed rate mortgage. By refinancing to a
30-year loan, you may be able to lower your house payment. Since
mortgage payments are made in arrears, you may be able to skip a house payment.
You may benefit from
mortgage refinancing with a cash-out refinance if you have equity in your house. A mortgage professional can help you decide if this is a good option for your
situation. By taking cash from your equity, you can pay off debt or
put it in savings to use for house payments down the road. What you
do with the cash is up to you, but using the money to better your financial situation can help you avoid
Remember that banks and
mortgage companies are not in the business of selling real estate.
They have a vested interest in keeping you in your house. If you
have an FHA loan, your current lender can help you with a streamlined refinance. You may be able to refinance to a lower payment with minimal paperwork and
If you have done all that
you can, and are still not able to make house payments, call your lender right away. You may be eligible for a loan modification. Consult with an attorney. An
attorney may be able to help expedite a loan modification or work with your lender to restructure your
loan. If foreclosure measures have already been started, an
attorney may be able to slow down the process. In judiciary states, it can take up to a year before a lender can
foreclose and evict a homeowner. The timeline is closer to 160 days in states which don’t have a court system to
go through. If nothing else, you may have to file for bankruptcy
Talk to a mortgage
professional right away and find out what can be done to help you avoid losing your house through foreclosure.
If your lender is aware of your situation, and knows you are motivated to keep your house, they may be more
willing to help.