Don’t Give Your Home Up Without A Fight
Hundreds of thousands of homeowners are facing imminent foreclosure, one of the largest groups of consumers to be in this position at the same time. If you are more than three months late on a mortgage payment, then you may have already heard from your bank that foreclosure proceedings will soon be started. Continue down this path and you will lose your home, your credit will be trashed and it’ll take many years before a lender will offer a home loan to you. Even then you may be subject to onerous financing terms, taking the appeal away from homeownership.
Instead of allowing a foreclosure to take place without offering a challenge on your part, you may want to investigate several options available to you to help you avoid foreclosure. Certain options could help you buy some time and let you stay in your home for the long haul. Besides, a foreclosure could be a nasty blemish on your credit record which can make it difficult to secure a personal loan, rent an apartment, even land a job.
Four Options To Help You Avoid Home Foreclosure
Talk with your mortgage broker – An honest discussion with your lender may help you gain some time, perhaps even land you a loan deferment. You will probably have to prove that your financial situation is in the process of changing for the better, a tangible improvement over those months when you fell behind on payments. Ask your lender to modify the loan, by adding missed payments to the end of your mortgage. Your mortgage term will be extended, but it’ll allow you to keep your home and work toward improving your financial position. Importantly, you may be able to land a lower interest rate.
Plunder your retirement account – Your company retirement account, if it wasn’t decimated last fall by the stock market collapse, could help fund your home. Consider borrowing just enough money to cover your late payments, perhaps meet several future payments. Please note that you may have to pay this money back, but compared to losing your home to foreclosure, that is a comparatively small burden to bear!
Ask friends and family – Close friends and family members may be able to come to your assistance if you alert them to your plight. To keep things in order, put everything in writing just as you would for any kind of personal loan. If possible, spell out repayment terms or at least offer to repay once your financial crisis has passed. Keep in mind that any type of loan between you and those you love can strain your relationship — make sure that it is a solid one before pressing forward.
Get out now – Unless your local housing market has collapsed, you may find it worthwhile to contact a real estate agent and put your home on the market immediately. Work with someone who won’t tell the world that your property is distressed. She may be able to find someone who is willing to take over payments, perhaps arrange a short sell (or short sale) where a buyer will pay less for your house than what is owed. However, the lender will need to agree to this arrangement first. And, your credit rating may take a huge hit.
If you don’t have the financial means to make payments, then nothing will stop the foreclosure train from traveling down the track. However, if you have a plan of action in place where you can demonstrate to your lender that your financial position is on the mend, then you may be able to avert home foreclosure.
Photo Credit: Laura Leavell