Stop A Foreclosure Sale And Keep Your Home
One of the most difficult situations for a homeowner to face is a possible foreclosure.
After all our homes are our places of refuge, and the thought of them being taken away
is not pleasant. However, if you find yourself in a situation where foreclosure is a very
real possibility, you should know that there are a number of steps you can take to
stop foreclosure and keep possession of your home.
Your first decision should be whether it's truly feasible for you to keep your home.
Generally, if you've suffered a temporary financial setback that has since been alleviated,
and your monthly house payment (including taxes and insurance) is less than 40% of your
gross monthly income, there is no reason why you shouldn't be able to keep your home.
However, if the payment is more than 40% of your monthly income, then you should seriously
consider selling your home in order to avoid additional damage to your credit report.
If you've decided that you're going to try to keep the house, you have several options.
Negotiate With Your Lender
The first option to do to stop foreclosure is to be up front and honest
with your lender. You should always be to attempt to negotiate with your current lender.
Many people think that the bank enjoys repossessing homes, but this
couldn't be further than the truth. Their aim is to keep payments
current, not take away your house because banks are losing money if they
take back your homes. Therefore, banks usually have special financial
assistance programs available that you can take advantage of to stop
foreclosure.
If you believe that you can make up defaulted payments over a number of
months, and your history with the lender up to this point is good,
they'll often be willing to rewrite the note or arrange a payment plan
or even allow you to make double payments in order to get caught up.
However, you'll need to present the reason that you were in default, and
a plan for repayment that can be backed up with proof of change in
circumstances for a lender to be receptive. Even if you're fairly sure
that the lender will not be receptive, you should still make the
attempt.
Refinance Your Home Loan
The second option is to refinance your home loan. With the interest rates at all-time low now,
you might want to refinance your home loan if you bought your home when the interest
rates were higher. With lower interest rate, you will be able to reduce your monthly payment
and eliminate your problems. If refinancing through your original lender isn't a possibility,
you still may be able to stop foreclosure on your home by refinancing through another lender.
Generally, a lender will require that the total of all loans against your home must be less
than 75% of your home's current market value. The more equity you have in your home, the more
likely it is that you've be able to refinance and bring your loan current.
Find the best interest rates and
refinance now!
If you can't negotiate on your own, there are several non-profit groups who can help
negotiate with your creditors, including your home mortgage holder, and work out a payment
plan for you. Credit repair organizations are a viable alternative to declaring bankruptcy.
Bankruptcy should be your last resort. If you have no other options available, and a
foreclosure sale is imminent, declaring bankruptcy under Chapter 13 can allow you to repay
all outstanding debts over a period of 3 to 5 years, while keeping your assets.
Overall, it is possible to stop foreclosure. The most important thing is
to communicate with your lender if you have a problem with your house
payment. You will be able to work out a solution with them before it
gets too late. Alternatively, you can consider refinancing your home
loan so that you are able to bring your loan current.
No one wants to face foreclosure, but if you find yourself in this position, it will help
you if you are aware of services available that you can take to
stop foreclosure and keep your home now.
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