There is a peace associated with having a good home and being able to make a regular mortgage payment every month. Once you start having difficulties making your payments, that peace is destructed. Mortgage foreclosure is the process by which your lender put your home up for sale due to your inability to make a payment on your loan. Having financial difficulties is not the end of the world. You don’t have to let your lender foreclose your home because you don’t have money. There are steps you can take to stop mortgage foreclosure on your home. Consider the following:
- Loan modification
A loan modification lets you make changes to your loan agreement. The changes can include a reduction of interest rate, reduction in the monthly payment, increase to loan duration, etc. The changes are to make it easier for you to catch up with your mortgage payments. Once you conclude with your lender, the foreclosure will be stopped. Contact your lender today and fill a loan modification application.
- Mortgage forbearance agreement
Through a hardship letter, you can make your lender understand the circumstances that lead to your financial difficulties. Use the avenue to request a forbearance agreement. The agreement can include that your loan payment is suspended for a particular time. It could also be that you will be paying a fraction of the original monthly payment until you can make full payment.
- Refinancing
Refinancing is the process of taking a new loan to pay off your current mortgage in full. Some investors will be willing to help you refinance your loan if your lender refuses to help you. Although most investor loans come with a higher interest rate, it can help you stop a mortgage foreclosure and save your home.
- Short sale
If you don’t mind losing your home, it is better to sell it than have it foreclosed. A foreclosure will damage your credit score, whereas a short sale will keep it the same or increase it. A short sale is when you sell your house for a value lesser than the amount you owe. Therefore, it is vital to have your lender’s consent before proceeding to a short sale agreement.
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