| How do I save a house in foreclosure? This is a | | | | lot of red tape. |
| question that is being asked around the country | | | | Keep in mind that selling your home can take |
| by thousands of unfortunate homeowners. Many | | | | several months or longer. You will need to keep |
| people who have been affected by a combination | | | | your payments from falling so far behind while |
| of job losses, falling home prices and rising | | | | you are trying to find a buyer that your bank |
| mortgage payments are having trouble keeping | | | | goes ahead with the foreclosure process. Do your |
| up with their house payments. So what is the | | | | best to keep up, and keep the bank or mortgage |
| solution? How do you save a house in | | | | company informed about what you are doing. |
| foreclosure? Here are some suggestions. | | | | Many companies will work with you if you talk to |
| Increase Your Income | | | | them. Avoiding their phone calls is a sure way to |
| Increasing your income is easier said than done. | | | | speed up the foreclosure process. |
| However, it is a realistic solution to save your | | | | Work With the Bank |
| home from foreclosure. Getting a second job or | | | | Some banks will enter into loan workout plans to |
| starting a business on the side can give you the | | | | help homeowners who are having trouble paying |
| extra income you need to be able to make the | | | | their payments. This is especially true if the cause |
| payments on your home until you can find a | | | | of your trouble is temporary; for example, you |
| more permanent solution. | | | | were off work for awhile due to sickness or |
| If you decide to start a business, try to focus on | | | | injury but have now returned to work. In such |
| service-related businesses that you can start with | | | | cases, some lenders will agree to a modified |
| little or no investment. Examples of this type of | | | | payment plan until you can get caught up. Some |
| business would be house cleaning services, | | | | will even allow you to resume making normal |
| babysitting or starting a handyman service. These | | | | payments and add the arrearage amount to the |
| types of businesses can be advertised | | | | end of the loan. |
| inexpensively by posting flyers on bulletin boards | | | | Work With an Investor |
| at the grocery store and other local businesses. | | | | There are advantages and disadvantages to |
| Once your payments are caught up, it's a good | | | | working with a real estate investor, but in the |
| idea to try to refinance the home to lower your | | | | case of foreclosure the advantages usually |
| payments to a more affordable level. If you can't | | | | outweigh the disadvantages. If you sell to an |
| refinance, or the payments will still be too high for | | | | investor, you are not going to get the best price |
| you to handle easily, selling the home may be the | | | | or terms for your home. The real estate investor |
| best option. | | | | is in business to make a profit. If he can't profit |
| Refinance Your Home | | | | by purchasing your home, he won't buy it. He will |
| Refinancing is easier to do once your payments | | | | expect to get a better price or terms than you |
| are caught up, or before they fall behind. If your | | | | would give a normal buyer. |
| payments are late, it will affect your credit and | | | | However, most seasoned real estate investors |
| you will have a harder time qualifying for a new | | | | are able to act quickly to buy real estate |
| loan to refinance your home. However, if you can | | | | properties. They can sometimes have a deal |
| qualify, refinancing can sometimes reduce your | | | | closed in a week or less, whereas typical closings |
| payment enough that you can afford to stay in | | | | usually take much longer, mostly because the |
| your home. | | | | buyer has to obtain a mortgage to pay for the |
| Borrow from Friends and Relatives | | | | home. |
| Some people are lucky enough to have friends | | | | Depending on the value of your home, the |
| and relatives that are willing and able to help out. | | | | payment amount and the amount you owe, the |
| If this is the case for you, don't be afraid to ask. | | | | real estate investor will decide whether he is likely |
| However, these friends will want to be paid back, | | | | to make a profit on the property. He may make |
| so make sure you come up with a repayment | | | | a cash offer if you owe significantly less than the |
| plan before you approach them. Figure out how | | | | loan balance. However, usually in the case of |
| you will come up with the extra money to pay | | | | foreclosures, the loan balance is close to the value |
| back the loan, and stick to your plan. If you | | | | of the property. In this case, the real estate |
| borrow money from your friends and fail to pay | | | | investor may offer to catch up the arrearage and |
| it back, it could be the end of the friendship. | | | | take over the payments on your home. Only you |
| Sell Your Home | | | | can decide if the real estate investor's offer |
| Selling your home may or may not be an option. | | | | works for you. |
| If home values in your area have fallen and you | | | | Conclusion |
| owe more than the home is worth, then you | | | | These suggestions should give you some idea of |
| would have to get the lender to agree to a short | | | | what you need to do to save your house from |
| sale in order to sell your home. In a short sale, | | | | foreclosure. Once you have fallen behind, it can |
| the lender agrees to take less than the balance of | | | | take a good deal of effort to get caught up, but |
| the mortgage as a payoff in order to avoid going | | | | it is worth it. By avoiding foreclosure, you not only |
| through the foreclosure process. You must be | | | | save your home but your credit rating as well. |
| able to prove that the value of the home is lower | | | | This will put you in a better position to obtain |
| than the mortgage balance, and you will probably | | | | financing in the future if you should need it. |
| have to fill out a lot of paperwork and deal with a | | | | |