The recession continues to drag on, with some hopeful signs of recovery. However, if you are in the situation, like millions of other home owners, you might be close to losing your home due to unexpected financial problems. Preventing foreclosure might not be the easiest task for you to complete. The first steps to take are to analyze what happened, see where your financial situation stands now, and then discussing your situation with your lender.
Steps to take to help stop your home from going into foreclosure:
Write down what happened and what caused your current financial problems. How did you get behind on your payments?
Create a budget of your monthly income and determine how much you have available to make some form of arrangement with your lender. Consider if you have equity in your house.
Do the hardest part, contact your lender to discuss how you might prevent from going into foreclosure.
There are several methods to bring a home mortgage loan current. Some options may not work for your situation, but at least one of the methods below might help you stay out of foreclosure.
Ways to bring your mortgage loan current
Loan Modification - Your lender can alter the terms of your loan to bring your payments down to a level you can afford. This can extend the length of your loan by many years, but can help prevent foreclosure now.
Forbearance - Your lender will let you pay lower (or no) payments for a limited amount of time, but your future payments may increase or be extended onto the end of the term of the loan.
Home Equity Loan - If you already worked your budget from above, you will know how much equity you have in your home and know if there is enough to use to bring your loan current.
Repayment Plan - You pay extra on your mortgage loan, in addition to your normal mortgage loan payment, until your loan is brought current.
Refinance - A choice remaining if you are still current on your loan. If you are behind on your payments, you may not be able to refinance your home.
Bankruptcy - Usually the last option, but if you are in the position where you might lose your property, bankruptcy could be a viable option.
Reinstatement - You pay the lender all late payments and any added fees. While this may be the most difficult option, it is also the best option if you are able to secure the funds to manage payment of past due amounts all at once.