Understanding the Alternatives to Foreclosure
Our home is our most valuable possession, providing us with safety, security, and shelter from the storms of life. But sometimes due to circumstances outside of our control, like economic loss, our very refuge can become at risk of being taken from us.
But that doesn’t need to be the case. There are alternatives to foreclosure, particularly if your family is suffering from an economic hardship – setting up an appointment with a real estate lawyer is in your immediate best interest. A professional skilled in real estate and foreclosure law will be able to advise you in your best options to protect your most important asset, your home, and if nothing else, your credit and your good name.
There are alternatives to foreclosures, all of which an experienced expert can explain in more detail, but here are the basics.
Get Your Payments Current
While this may sound harder than you think, one never knows what the future may hold. There may be a sudden change in the financial situation, a new job on the horizon. A homeowner has until the day before the foreclosure sale to square things up. A loan or gift from family members or selling other property and assets may be enough to reinstate your mortgage. An expert can help you think outside the box and get creative with ideas to come up with all of the back payments, fees, and fines due the holder.
Loan Modification
Depending on your other debt, such as credit cards, school and vehicle loans, and medical bills, you may be able to work with your mortgage lender to change the terms of your loan. If you have been able to maintain the monthly payments but just not get a grasp on the accruing fees, this may be a viable option for you.
Refinance
If your credit is still in good shape and you have considerable equity built up in your home, refinancing is an excellent option to consider.
Forbearance
Under extreme circumstances, like severe illness or injury, a temporary loan forbearance may be arranged whereby the loan isn't due for a specific period of time. Usually interest still accrues.
Bankruptcy
While bankruptcy tends to be a last resort, is expensive, and severely damages your credit, it is an option that may need to be considered depending on just how bad your financial situation is. It can have a silver lining, but only with the expert advice of a foreclosure attorney should this option be exercised.
There are also things such as a short sale and a deed in lieu of foreclosure, but every situation, state laws, and loan terms are different, so the best things one can do for themselves is seek professional legal advice to hopefully avoid foreclosure.
