7 Ways to Stop Foreclosure
7 Ways to Stop Foreclosure
When you bought your home, you probably had high hopes to keep it long term, make every payment and refinance or sell it later on. Unfortunately, life happens, and maybe you found yourself without a job, behind on payments and about to lose your home. Or maybe, you inherited a family member’s home with a mortgage and are now trying to keep up with both payments and make sure you have enough left over to put food on your table. Or maybe you bought the house as a rental, and allowed a family member to move in, and a couple months in, they stop paying rent. And now you’re forced to make payments to avoid destroying your credit.
Now, if you’re like homeowners we have helped in the past, you’ve probably been hyper stressed, losing sleep and worrying about what the future will look like.
These are all scenarios we see on a weekly basis and have helped hundreds of homeowners overcome. If you are behind on your payments, or about to be, and you’re not sure what your options look like, I got you. Below are seven ways to avoid foreclosure.
Loan Modification
If you act proactively, your lender may alter your loan conditions to provide a more manageable monthly payment. However, this adjustment could extend the mortgage term, potentially increasing the overall cost. Ensure the new payment is affordable, as failure to meet it could lead to another mortgage delinquency, and could prevent your lender from offering additional assistance.
Repayment Plan
Coming up with a huge sum of cash to pay off your arrears may not be possible and you need to pay it off over time. A lender might present a structured repayment schedule allowing you to catch up on overdue payments within a set timeframe. This option does not decrease your total debt. Confirm that you can manage higher monthly payments until you are current before choosing this plan.
Forbearance
A forbearance agreement permits you to temporarily make reduced mortgage payments or skip several payments altogether. This solution is typically offered for short-term hardships like job loss, natural disasters, or medical issues.
Short Sale
A short sale involves selling your property for less than the mortgage balance. Post-sale, depending on local laws and your mortgage terms, the lender might waive the remaining debt or still hold you accountable. Before you agree to a short sale, you may want to request the lender to provide written confirmation of any debt forgiveness.
Deed in Lieu of Foreclosure
Essentially, a deed-in-lieu of foreclosure means that you sign your house over to the lender and walk away in order to avoid foreclosure. As with a short sale, you need to make sure you won't be personally liable for the remaining mortgage balance. Also, be sure to ask if the lender offers a "cash for keys" program which can help to pay for relocation expenses.
Contact a HUD-Approved Housing Counselor
Before signing any agreements, consider reaching out to the Department of Housing and Urban Development (HUD) for guidance. HUD provides free counseling to homeowners in distress. A counselor can review your circumstances, suggest government programs, and offer advice on budgeting and managing debt. Contact your local HUD office for more information.
Sell Your Home for Cash
If keeping up with your mortgage is unfeasible, selling your house for cash might be the best and easiest route. Companies like House Offer Hub can expedite the sale, eliminating extra fees, closing costs, and delays.