Foreclosure looming and looking for options? You are not alone. It has been estimated that 1.4 million homeowners in the U. S. will face foreclosure in 2008 alone. Fortunately, there are some steps that you can take to save your home from foreclosure. The important thing is that you act fast. Read on for three ways to stop foreclosure.
Sometimes it is possible to avoid foreclosure by negotiating with your lender for a loan modification. If your situation is the result of a temporary financial crisis and you wish to save the home, this option may be right for you.
In a loan modification, the terms of your loan such as interest rate and/or duration of the loan are changed. This is often done to take late payments and add them on to the loan (changing the loan term), or to change an adjustable rate mortgage in to a fixed rate mortgage (rate adjustment).
Like a loan modification, a refinance loan can be used to take an un-affordable mortgage and make it affordable once again. In the case of a refinance, you are paying off the old loan with a new one. If you have not been in your home very long, this sets you back to square one however you can take advantage of more stable terms, like fixed rates.
By refinancing and paying off the loan, you can avoid foreclosure. Do keep in mind that this option is only practical if you approach it early in to the problem. If a refinance sounds like a good option for you, you should seek one before falling behind on the mortgage or at the first signs of trouble. If you have recent late payments to your lender, this can have a negative impact on the rates that you can get for your refinance.
A short sale is an option of last resort. In a short sale, the bank agrees to allow you to sell the home for less than you owe on the loan and they write off the difference. Short sales are not common and they don't save your home but they can allow you to avoid foreclosure and give you a fresh start if your bank is agreeable.
In todays declining real estate market, short sales will become more common as housing prices drop and banks are left with little choice. There are a few cautions about short sales. First, they can be a problem if you have more than one mortgage on the home. Secondly, you will want to check with a tax adviser because it's often the case that the borrower is responsible for taxes on the forgiven amount.
Of course, the first thing you should do if you are unable to keep up on your mortgage is to communicate with your bank and try to work something out. Banks aren't any happier about foreclosures than homeowners are. It is in their best interests to work with you for a solution that accommodates both sides.
If you need help to negotiate with your bank, or need more information on your personal options to save your home from foreclosure you should consider using the services of a foreclosure specialist. You can get a free consultation with the nations top foreclosure specialists, Click Here .
To learn how to stop foreclosure yourself in as little as 20 minutes, check out the Foreclosure Survival Handbook !