Today we are discussing how to avoid foreclose on your home. Foreclosure is a legal process that carries out with a lender attempting to recover the balance of a loan from a borrower, who has stopped making payments to the lender, by forcing the sale of the asset used as collateral for the loan. There are many reasons why people may stop making payments such as them being laid off from work, fired or quitting, medical conditions that deem them unable to work, excessive debt and mounting bill obligations, squabbles with co-owner, divorce, job transfer to another state and more. When the market crash happened from 2005 to 2011, tons of home owners just walked away from their homes because the values had dropped and they owed more on their homes then what their homes were still worth. None of these things are excusable and you won’t make anything better by ignoring your lender either. If you’re facing financial challenges and having trouble paying your mortgage payment you are probably very stressed out and you might feel like you don’t know what your next step will be but instead of avoiding it there are many things you can do to avoid foreclosure instead. Be sure to contact your mortgage broker and keep them in the loop.
Everyone’s situation can be a little different. If you aren’t under any severe financial difficulty then you might be able to just sit down, re-write your budget and prioritize your spending habits. You might have to even sell of some assets if you have any. The thought of looing your home can be daunting but it can also be manageable if you stay calm and look at your options. One of the first things you
can do is consider refinancing. You can make a repayment plan or you can try to do some loan modification. If those options aren’t viable for your situation, you can take a look at two other options to avoid home foreclosure. Short sale is one of them and then deed-in-lieu of foreclosure. A short sale might be the best option if you need to sell your home and it has lost its value. A short sale lets you sell your home and use the proceeds to pay off your mortgage even if the sales price is less then you owe.
If you’re facing the prospect of a foreclosure sale you can consider a deed-in-lieu as a possible way to avoid it. In some way this is much like a short sale. A deed-in-lieu- of foreclosure lets you transfer ownership to the financial institution without going through the foreclosure process. In either case a short sale or the deed-in-lieu is a better option then a foreclosure sale. In some circumstances, preventing foreclosure is not possible. If you are facing foreclosure and haven’t talked to your lending institution about getting help, you should contact them as soon as you can. Together, there may be ways you can find to help you stay in your home or transfer ownership in a way that will be better for you then a foreclosure sale.