Five Options a Homeowner Can Choose from to Avoid Foreclosure
Foreclosure is a serious mark on your credit. It is one you should avoid if at all possible. There are a few ways that you can stop a foreclosure from happening if you are behind on payments.
1. Attempt to get your mortgage modified.
Most lenders seek to avoid the cost of foreclosing on a mortgage loan. The lender almost always takes a loss when they have to foreclose on a property so they will usually work with the homeowner if they can to avoid the expense. Do not avoid your lender if you cannot make your payment. In fact, call them before they call you. If you keep your lender abreast of your situation, they will not think you are just neglecting you make your payments.
2. Refinance your mortgage.
If you are having trouble making your current payments and are facing foreclosure, refinancing your current mortgage may be an effective solution. It is sometimes hard to get a loan when you are behind on your current mortgage, but if you can qualify, a refinance can extend the term of your mortgage. Refinancing into a new 30 year mortgage may lower your payments enough to enable you to keep your home.
3. List your home for sale.
Sometimes keeping your home is not feasible. If you become unemployed with no job prospects and are unable to make payments on your mortgage, listing your home for sale with a good realtor can help minimize your loss. In the ideal situation, your home will be sold to someone who will pay at least what you currently owe on the mortgage. If not, your lender may accept a short sale. You will have to request that kind of exception, though, because it results in a loss to the lender and they do not normally offer it to homeowners.
4. File Chapter 13 bankruptcy.
Chapter 13 bankruptcy is a debt reorganization plan. In this type of bankruptcy, you repay all of your bills on an extended payment plan. Your lender cannot foreclose on your property if you file Chapter 13 bankruptcy and make your required payments under the agreement. If you have an income and can make the payments required under a Chapter 13 bankruptcy settlement, you can keep all of your property. However, if you miss your payments, your lender will be able to foreclose on your home.
5. Take out a personal loan to cover back payments.
If you are short on one payment or you are short on a payment that your lender has told you that you have to make to avoid the foreclosure process, you may want to consider taking out a personal loan to make that payment. A cash advance lender such as cash advance USA may be able to help you with the money you need. Personal loans are not a solution to the problem, though. If you do not have the means to make regular payments, you need to consider other options, such as moving into a smaller house or apartment that is more within your means.
You can visit Cash Advance USA for a quick cash boost. Don’t let one financial mistake ruin your credit score.
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