If your bank or lender is threatening to take your home through foreclosure, you are no doubt looking for solutions to stop the foreclosure from happening. In this article, we are going to look at some simple things you can do to avoid losing your home through foreclosure.
Foreclosure Solutions You Can Live With
There is more than one way you can stop the bank from foreclosing on your house, yet most foreclosure solutions involve one simple step: first talk to your bank or lender. It is more than likely that it is not in the bank's or lender's best interest to foreclose on your property. They will probably be more willing than you think to help you find a solution to your foreclosure problem. In doing so, you can keep your home and they keep receiving their payments.
The first option is to refinance your home mortgage. Some banks will offer you a chance to refinance your home at a lower rate, effectively reducing your payments. This may help some people get their budget under control in addition to getting the bank off their back. A refinanced loan is a new loan that will start payments over again. You can 'roll' any late payments into the refinance amount so that you now become current on your home loan.
While you can get back on good terms with the lender and get a fresh start, should you be able to get a lower interest rate for your new mortgage, your payments will likely be lower as we said before. Of course, that is assuming that you keep the same terms as your previous loan. If you get a longer term, you payments, your payments could be even less. However, there are reasons why a longer term is not a very good idea. While your monthly payment will be less and this options looks attractive after being in a financial mess, less of your new payment will go to principle (equity) and more will go toward interest, all of which could prove to be detrimental over the longer term. Either option is one of the foreclosure solutions that can help you get back to sound financial footing, get the bank or lender off your back and get you a fresh start.
The second option, and one that is far less appealing in most cases, is to sell you home. Under duress, this can be a difficult choice. The time it takes to sell the house will put a lot of pressure on you, your family and the bank or lender that is still looking for payments to bring your loan current. The bank may become suspicious if it appears you are trying to bail out on the loan and they may not be willing to work with you while you sell your house. Remember, too, there are many fees commissions, etc. in selling a house, so the actual sales price will not be the amount you receive in order to clear your obligation.
In the final analysis, the best foreclosure solutions are simple ones that keep you in your home and paying on your current loan. If you have fallen behind in your mortgage payments and looking at a possible foreclosure, finding a way to get caught up and back on good financial ground is the better option. You may even consider taking a second job temporarily or working from home in your spare time to keep you ahead of the game for now while you work on and finalize your other options.
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Author Sean Roberts has written several unique articles about foreclosure. See more of his writings here about foreclosure. You can also read other articles by him at the blog Desert Blogger.
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