How to Avoid Foreclosure
Most of us run into money problems at some point in our lives, and have to try some creative financing. If you own your home, and are in a tough situation, you may be at risk for losing your house through foreclosure. If you find yourself in this kind of trouble, the good news is, there are some ways to hold onto your home.
Foreclosure is a serious situation that means your lender can take your house and resell it if you start missing payments. Fortunately, you usually have some alternatives to consider. First, you can try to find a way to keep it. Second, you can put the house on the market yourself, and use the proceeds to pay off your loan and any additional charges you’ve incurred. Third, you can go through foreclosure. If you do this however, it will be up to you to pay any balance due once the loan is paid off.
The first rule of thumb is to respond to any letters you receive about late payments. The worst thing you can do is just ignore them. Call the number provided and give a detailed explanation to someone as to why you are behind. Remember that a foreclosure is a major undertaking for the mortgage holder as well as you, so they will most likely try to work with you. It costs them money, time and trouble.
If you are suddenly unemployed, have an increase in monthly expenses, or your salary has decreased, you may be eligible for a Special Forbearance. With this option the mortgage company lets you make lower payments, or even no payments for a certain period of time.
You might also consider a Mortgage Modification. In this case you would refinance your home or extend the time at which the loan is due to be paid off. This option will help you catch up in making your payments. A Partial Claim is designed to help you get a non-interest bearing loan through the Department of Housing and Urban Development (HUD). Your mortgage company would help you with this, and if successful, your loan will become current.
Remember, if you fall behind, rather than worry about foreclosure, talk to your mortgage company to see what programs you would qualify for so you can stay in your home. Never ignore the problem, because you likely have several viable options to fix your foreclosure problem.
Copyright 2006, Gerry Vandewall, All Rights Reserved. This article may be published on web sites or in newsletters provided this notice and the resource box is included without ammendment.
Filed under: Business