While the economy is still shaky in the U.S, mortgage foreclosures carry on rising. If you believe or know that you won’t be able to keep up with paying your mortgage payments every month, or when you have started defaulting already, and the threat of foreclosure is looming. There are still a few options to avoid this process if you wish to keep your home.
Carefully Go Over All The Information
Don’t take things for granted, assume nothing, and don’t trust anyone. This means that you need to closely read every document you have received from your trustee or lender. If there is anything you don’t understand, speak to your lender and ask them to explain in detail what they are asking you to agree to. Keep in mind that they cannot force you into signing something. If you still feel uncomfortable, you can request to speak to the manager of the lender.
Find Out If A Payment Will Extricate You
Find out the amount of money it is going to cost you in order to prevent foreclosure. If you have been given a minimum amount to pay that is going to slow down the process of foreclosure, if possible, pay that amount immediately. Ask for a total on the exact amount of charges and back payments. You could avoid losing your house over one back payment which could have been easy to scrounge together.
Seek A Compromise
In this free-market system, there is always room for negotiations. This ultimately means that you won’t know what is available to you until you ask. You may find that you can come to a compromise with your lender when it comes to adjusting your current payments.
Lenders make a profit off your mortgage, from the interest and principal payments. Foreclosure is not a lucrative or attractive choice for them. In fact, on average, lenders lose $50,000 or more on most foreclosures. You will probably be surprised to find out about the willingness and flexibility of the lender to find a deal that works for both of you.
You might want to suggest suspending your current payments for a few months, to give you the time you need to fix your finances. You could also suggest making reduced payments over the next 3 to 6 months until you are in a better financial position.
Borrow Money From A Friend Or Family Member
If you are about to lose your home, you might not be able to borrow more money from other banks. However, the thought of losing your home is catastrophic and is a good reason to ask a friend or family member for help. Make sure you are completely honest about how long it is going to take you to repay them and make sure you put everything in writing and that you and the other party sign this document.
Refinance Your Loan
You could try and find mortgage brokers that can refinance the existing loan. Interest rates are low at the moment, and refinancing the loan at an interest rate that is lower can reduce the payments you have to make monthly and increase your current cash flow, giving you ample opportunity to clean up your finances.
A great solution that works well for many homeowners has been to sell their house to real estate investors buying houses in their city or town. This works best for sellers if their property need repairs, fast cash or to avoid foreclosure sale of your home.