How to Save Your Home From Foreclosure?

How to Save Your Home From Foreclosure?


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How to Save Your Home From Foreclosure?

The best way to stop foreclosure is to prevent it from the beginning. There are thousands of property owners who pay their mortgage on time and secure their homes. However, there are people who cannot make payments only after a few years and end up losing their properties.

If you look at the statistics, you can easily trace the reasons.

An affordable mortgage loan with a nice income supply makes it easier to pay off your debt.

Excessive debt, lack of work flow, exotic mortgage and adjustable interest rates make sure that the foreclosure becomes inevitable.

When searching for a home, you should always calculate your income to expenses ratio. Will you be able to spend 30% of your monthly income on mortgage installments for 30 years?

If not, it is time to look for a small home or save more to make a big down payment.

Careful planning is the best way to save your home from foreclosure.

Sometimes, circumstances can be pretty rough. A job loss or a health issue can trigger the foreclosure. If your loan has been backed by the FHA insurance, you should be able to use these options.

Options to Save Your Home From Foreclosure

Forbearance

If you have a valid reason of not making timely payments, the lender can forgive your loan for a specific period. You pay no money during the forbearance period. Once you get a new job or you recover, you can start paying the mortgage.

Short refinance

If the lender is convinced that your mortgage is unaffordable, you are eligible for a short refinance. The lender will forgive some of your loan. A second loan is issued on the property with better interest rates and new terms.

Loan Reinstatement

For FHA financed loans, you can get an interest-free loan of upto $10,000. You can use this money to pay your pending installments through a one-time loan. This will make your loan current and everything will start running smoothly.

You don’t have to pay the new loan($10,000) for years.

Now let’s consider a common question.

Is it wise to keep my home when foreclosure is inevitable?

No, you have better options available.

Pre-Foreclosure Sale

You can sell your home through a pre-foreclosure sale or give it back to the bank through the deed in lieu of foreclosure.

Your best options is to collect your financial documents and get a home appraisal. Know what your home is worth. You can sell your home to an investor who will pay cash within 10 days. Use this amount to pay off your debt.

You can also negotiate terms with the investor. In some cases, you can purchase your home back when your finances become stable. Renting your own home is also a considerable option.

Consult a foreclosure attorney to discuss this matter. You should also consult a local real estate solutions company. You might be able to keep your home by lending your home equity or by renting your own home. (This only applies if renting is more affordable than paying the mortgage.)

What If I Cannot Sell My Home?

During the 2008 housing crisis, the property prices went down significantly. Homeowners facing foreclosure had no choice rather than going for a short sale.

If the property worth has declined over the time, it’s time to opt for a short sale. Every borrower is not eligible for a short sale and most lenders won’t accept this unless it is their last option.

Talk to a short sale attorney before you make any such decisions.

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