| At the first sign of financial trouble, we | | | | legal expenses. This is the quickest method of |
| recommend talking to your lender to help avoid | | | | resolving your financial problems, if you can |
| foreclosure. This may seem embarrassing or | | | | manage the lump sum and it helps avoid |
| nerve-wracking, but it is the first step towards | | | | foreclosure. |
| avoiding foreclosure. Your lender doesn't want to | | | | However, if you are in more serious financial |
| take your home as they are not in the business | | | | troubles that will prevent you from making |
| of real estate! The longer you wait to talk about | | | | payments over a long period of time, you have |
| financial problems with your lender, the more | | | | some different options to help avoid foreclosure. |
| difficult it will become to find a solution that works | | | | One option to avoid foreclosure is to refinance |
| for everyone and avoid foreclosures. | | | | your existing mortgage. This means you will be |
| If something comes up that prevents you from | | | | applying for a second secured loan that will allow |
| making your payments for a short period of time, | | | | you to pay off your existing mortgage at a more |
| like temporary unemployment, illness or | | | | favorable interest rate. This method works well if |
| unforeseen medical expenses, there are several | | | | you have a fair amount of equity in your home. |
| options to help you avoid foreclosure. You might | | | | Because interest rates fluctuate over time, you |
| consider forbearance, a repayment plan or a | | | | may be able to exchange a higher interest rate |
| reinstatement plan to avoid foreclosure. | | | | on your existing mortgage for a lower one, which |
| Forbearance means a temporary hold on your | | | | will lower your monthly payments. |
| payments. Interest will continue to accrue in the | | | | Refinancing can also help avoid foreclosure by |
| interim and the interest will be added to the | | | | shortening the term of your mortgage. |
| remaining balance of the loan. When the | | | | Another option to avoid foreclosure is to give |
| forbearance period closes, you will make full | | | | your property back to the lender via Deed in Lieu |
| payments on the mortgage (including the accrued | | | | foreclosure. This means that the bank takes your |
| interest). | | | | property as payment for your outstanding debt. |
| A repayment plan, otherwise known as an | | | | Although this means giving up your home, it will |
| amortization schedule, works on the basis of | | | | not affect your credit rating as negatively as an |
| nominal interest. If you calculate how much | | | | actual foreclosure. You might consider selling your |
| income you have and how much money you | | | | house to avoid foreclosure. You may be able to |
| spend, you can determine if a repayment plan will | | | | avoid foreclosure by getting the bank to stop |
| work for you to avoid foreclosure. If you can | | | | proceedings by agreeing to sell your home. To |
| make your regular payments on time, you set up | | | | avoid foreclosure, you might need to accept a |
| a payment schedule in which you pay more | | | | lower asking price for your home due to time |
| money each month to work off the late | | | | limits set by the lender. |
| payments over a set period of time. Although the | | | | The most important thing for you to gain from |
| repayment plan takes time for you to get out of | | | | reading this guide to avoiding foreclosure is the |
| debt, it will help you avoid foreclosure in the long | | | | understanding that time is the key factor. If you |
| run. | | | | want to avoid foreclosure, speak with your lender |
| The third option to avoid foreclosure is a | | | | as quickly as possible. The longer you wait, the |
| reinstatement plan. You can use a reinstatement | | | | less desirable your options become. Avoid |
| plan if you are able to resume your regular | | | | foreclosure of your home by investigating the |
| payments and provide a lump-sum payment that | | | | options available to you now! |
| includes back payments, late fees and any other | | | | |