Foreclosure is one of the most problematic issues that does not simply result in loss of the home but also is loss of credit too. Foreclosure is the process through which the lender sells off the home to get back the money he had lent to you, foreclosure can happen only if you fail to keep up even the minimum payments and if you default on the home loan. However, there are a couple of options through which you can solve the mortgage related issues, and avoid your home foreclosure.
The very first thing that you need to know in order to avoid losing your home is, how to stop foreclosure?
Helping you stop foreclosure
Foreclosure is a very complicated procedure and thus its effect on your credit is heavy too. Therefore, it is extremely important for you to avoid foreclosure as far as possible. It is not only important for you to find out the options which can help stop a foreclosure proceeding. You can also opt to get the help of an attorney, who may have enough experience in guiding you to avoid loss of your home through foreclosure.
Options to save your home
Some of the options through which you may be able to stop your home from getting foreclosed are:
1. Loan modification – Loan modification is the option through which you can get the terms and conditions of your home loan modified. This helps you in continuing with the payments, as the interest rate may get lowered. In some cases, the lenders may even agree to reduce the principal amount borrowed. This is a great option for you to avoid letting your home getting foreclosed, as you are not even required to borrow more so to pay off the primary mortgage on your home.
2. Refinancing – Refinancing your home is one of the other options which can help you in saving your home from foreclosure. The advantages are same as that of loan modification. However, in case of refinancing, you are required to take out a second mortgage against your home. This mortgage will have to be a better offer than before, so that you can obtain a mortgage that has low interest rate and increased loan term. With this, making the mortgage payments becomes an easy affair.
3. Short sale of your home – Short is a process in which you will have to negotiate with your lender so that he agrees to be content with an amount less than what is owed. That is, you can sell off the home at much lower a price than what you had borrowed. This can happen only if the value of your home has considerably lowered and if it actually is not possible to get more than what you owe to the lender.
So, these are the main options through which you can avoid a foreclosure, and avoid hurting your credit too. However, the first two options help you not only to avoid a foreclosure proceeding but also to retain the home. In case of the third option, you cannot retain the home. You rather will have to sell off the home in order to get back some money – which is the present value of the home. That money will have to be handed over to the lender.