Foreclosure is a process that can move along quickly, as in some states, it may take fewer than 30 days. But should you end up having money issues, you’ll find things you can do in order to stop foreclosure and get you back on the right track. Some of the options available are less damaging to your credit rating compared to others. Bankrate.com debt advisor Steve Bucci recommends exploring all the options beforehand so that you may select the one that will keep your loss and your lender’s reduction to a minimum.
Rate your finances. Analyze your expenditures and monthly spending to try and ascertain what went wrong. If extenuating circumstances such as huge medical bills or a job layoff are the basis behind your current financial issues, your creditor may be willing to supply a remedy that will assist you catch up with missed mortgage payments.
Talk with your lender after you understand that you’re in financial trouble. Learn what you can do in order to stop the foreclosure procedure. Most lenders will work with homeowners to think of a manageable repayment plan.
Ask your lender to modify the conditions of your loan. Lowering your interest rate or extending the duration of time that you have to repay your mortgage loan are some of the probable options your creditor may suggest, particularly in case you have a good credit score.
Make up missed payments by a predetermined deadline, or repay the money that you owe at a lump sum. These are other options if you do not want loan modification as your financial troubles are only temporary. Based upon your situation, your creditor may even be willing to freeze monthly payments for a time till you’re able to resume making payments. Personal finance expert Suze Orman points out that while granting you a forbearance will be able to allow you to avoid mortgage foreclosure, the bank will still charge you the attention you’d owe if you’re making those mortgage payments as usual.
Look at selling your house. This may be the only feasible option if you’re no longer in a position to pay for a monthly mortgage. If your lender agrees, you’ll be given a deadline for finding a buyer for your house and paying off your mortgage balance. In the case of a house that has depreciated in value, the creditor may agree to a brief sale, which will allow you to sell your house for less than what you still owe the remainder of the mortgage.
