No one wants to lose their home through foreclosure. Losing a home can be one of the worst financial things that can happen to a person, but it happens all the time. Here are some ways to keep your house from going into foreclosure.
The key is to act quickly. Few people wake up one day and find out that their house has been taken away. There are always signs that something bad is about to happen. If you know about these warning signs and act quickly and decisively, you might be able to keep your home instead of having to move.
Contact the lender as soon as you know you won't be able to make a house payment. If you talk to the lender early on, they can help you figure out other options. Most banks really don't want to take your house. They don't want the trouble of going through foreclosure, taking care of the house, and then selling it. They would much rather come to an agreement, but this often requires you to talk to them right away.
You should always send a letter after a phone call. You can write a letter explaining your situation and send it to your lender. Now is not the time to be too imaginative. Be clear about why the payment was late, give details and be honest, but don't go on and on.
You shouldn't agree to a short sale unless you have no other choice. When the bank or lender agrees to sell your home for less than what you owe, this is called a "short sale." You will still have to pay the difference between the selling price and the amount you owe, and you will lose your home in the process.
Being polite and patient with lenders will get you a long way. A lender can help you in a lot of different ways. Some of these options are extending the time it takes to pay back the loan, stopping payments for a few months, or adding the payments that were missed to the end of the loan.
You might also want to talk to your lender about extending the contract. For example, if you have a fixed-rate loan for 30 years, you might be able to change it to a loan for 40 years. Not all lenders will be willing to do this, but it is worth asking because the difference in payment amounts can mean the difference between keeping the home and losing it.
Refinancing is also a common option, but homeowners should know that it is much easier to get refinancing when the housing market is going up and harder when the market is going down.
Some homeowners can also file for bankruptcy. This is a choice that needs to be made with the help of an attorney. The bankruptcy court can't always help homeowners. Because of this, you should talk to an experienced lawyer who can give you the facts and tell you if your home can be protected.
It's not always easy to avoid foreclosure, and it can be very stressful, but remember that it will stay on your credit record for seven years. After a foreclosure, it could be up to four years before you can get regular interest rates again. These are just a few reasons why you should try as hard as you can to keep your home from going into foreclosure.
