July 24, 2019Foreclosure is a process that no homeowner wants to go through. But the reality is that sometimes, financial hardship can cause missed mortgage payments. If you fall too far behind, your home is at risk of foreclosure. Foreclosures don’t only cost you your home, they are also incredibly damaging to your credit. It is possible to avoid foreclosure, even if you are currently at risk. Here are some of the steps that you can take to avoid losing it all.
Consider Your Options For Getting Back Into Good StandingHomeowners at risk of foreclosure have several options for getting back into good standing with their mortgage company:
- Reinstatement: This involves paying back the past due amount in a lump sum. This lump sum payment must be made by a specific date.
- Short Refinance: In this process, your mortgage company may decide to forgive a small part of your debt. The rest of your debt will be refinanced into a new loan.
- Special Forbearance: This is typically only granted in special circumstances, such as a medical emergency. In a special forbearance, you may get your payments lowered or suspended on a temporary basis. Your lender must agree to these terms, and generally only offers special forbearance if they believe the issue is temporary.
- Mortgage Modification: In a mortgage modification (also called loan modification) you can work with your lender to refinance and change the terms of your loan. You may be able to extend the term.