Are you a distressed owner facing foreclosure? Did you know there are several options for distressed homeowners to keep from losing your property? It's true. There are quite a few ways to get around a foreclosure, you just need to act. Placing your noggen in the sand and hiding from the problem is the last thing you will to do when facing a default. Here are a couple of tips to help avoid losing your home:
Refinance Your Present Mortgage
Finance rates are pretty low, making a refinance a pretty good possibility to keep from facing foreclosure. If you're an owner who is still up-to-date on their payments but you see something upcoming in the future that might keep you from making payments, talk to your mortgage holder immediately.
The government has implemented a program to help distressed owners with a refinance. There's a loan named Make Home Affordable which you will be able to qualify for so long as you occupy the residence, have a Fannie Mae or Freddie Mac backed mortgage, have a loan-to-value (LTV) ratio higher than 80% but not more than 125%, are up-to-date on your loan payments, and you have the income to take care of the new payments.
Work It Out With Your Lender
If you are facing foreclosure, there is a fair chance you had something unexpected happen. You might have lost your employment, had unexpected medical expenses, or other financial problems. If this is the case, you may be able to come to terms on a temporary solution with your lender until you're able to get back in good standing. Here are a few ways that you can deal with your bank:
Forbearance - A forbearance is where your lender lets you skip or make partial payments as long as you have a plan to catch up. Tell your bank if you have a tax refund, a bonus, or you have a new job lined up. Your lender will specify that you set a date for your reinstatement payment. Your reinstatement payment will have to be large enough to cover all of your missed payments, so plan accordingly.
If you can't make a full reinstatement payment, the bank may let you work out a repayment plan. The bank will let you make up the payments by paying an additional amount every month until you are caught up.
Call Your Real Estate Agent & Get Your Home Sold
Real estate agents are well versed in dealing with a distressed house owner. They typically have all the needed experience and contacts that can help you avoid a foreclosure through two options. You can try to sell your property outright, or apply for a short sale.
You might not feel great about leaving your property, but if you can't afford to make your payments, then you are going to have to leave either way. If you have equity or enough money to bring to closing, you can try and sell your property. Selling will keep your credit from being further damaged and allow you to purchase sooner than if you are going to to go with a short sale.
Speak with an agent about completing a short sale. It's a good option for property owners facing foreclosure. The short sale process can definitely be lengthy and tedious, but it's far better for your credit than a foreclosure will be. In today's real estate market many house owners are going to be in the same boat you are. A short sale is not something to feel ashamed of. A short sale will likely also help keep your neighbors happy since their house values won't be as affected if you were to go into a foreclosure.
Lastly, if you're dealing with facing a foreclosure, please do not wait and see what happens. The very best action you can take to prevent the loss of your property is to confront the problem from the get-go. More times than not, you will have options. The majority of home owners that lose their houses to foreclosure simply did not make any attempt to contact the right people early enough. Take action before it's too late.
