Steps to Take to Avoid a Foreclosure

Facing foreclosure is a stressful process. When you find your home on the brink of foreclosure, it is because you have fallen behind in your payments, which usually means that you are struggling financially in other areas. But just because you have fallen behind doesn’t mean that you are out of luck or that you need to just give up on your home.

Sell Quickly

Up until the day your lender repossesses your home, you still own it and you can sell it to pay off your mortgage and keep the foreclosure off your credit history. However, your lender can repossess your home 120 days after your first missed payment, so you don’t have a lot of time to act. Your sale must be closed before the lender takes possession, so a quick sale is your best option. Selling your home to a cash home-buying company is your best option. Not only will you have the cash in hand to settle your loan and find somewhere new to live, but these sales can move as quickly as you need, and you can be closed in as few as seven days.

Renegotiate Your Loan

If you don’t want to give up on your home, it is time to talk to your mortgage lender about any options you may have. Most lenders are willing to negotiate with you because they want you to keep paying back your loan. It is better for them to work with you than to take possession of your home and need to sell it to recoup the money. Come prepared with some suggestions that will help you get back on track. This could include keeping the interest fixed, adding back payments to the end of the loan, and lengthening the term–or anything else you can come up with. This is the time to work with your lender, so don’t get stuck on your pride.

Apply for Forbearance

If your financial issues are a temporary thing, you may be able to apply for forbearance. You can either work with your lender or apply through the Fannie Mae mortgage help network. Forbearance allows you to pause your mortgage payments for a short amount of time and resume them. The terms of the forbearance will depend on your situation, but when payments resume, you won’t have to pay off everything missed all at once, which makes everything a little easier to handle.

If you are worried that foreclosure is in your future, now is the time to act. The faster you move, the less likely these issues are to end up with you losing your home. Financial issues don’t have to ruin your life, it just takes extra work to get around.

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