Can I Avoid Foreclosure?

Times are tough for so many people right now. The Fed has increased interest rates, which has caused mortgage rates to go up as well. That’s not a problem for people with a fixed-rate mortgage. Those who have an adjustable-rate mortgage are more likely to feel the pain resulting from those changes. Then there’s the simple matter of changing financial circumstances due to job loss, disability, or illness. Any of these things could see a homeowner facing the prospect of foreclosure, a legal process through which a lender tries to recover their money when an owner stops paying their mortgage. Is that something you can avoid?

Apply for Loan Modification

If you think you could still pay for your house if the terms of your loan were different, talk to your lender about a loan modification. A loan modification is similar to refinancing your loan. It might mean extending the length of the loan term, which allows you to lower your monthly payments. Carefully evaluate your financial situation if you choose this option. It’s not a good option if you still can’t make monthly payments because they’re too high.

Request a Forbearance

Perhaps your financial difficulties are temporary. If that’s the case, try requesting a forbearance. A forbearance is a temporary hold on making mortgage payments for a set period, after which you’ll start making payments again. Keep in mind that you’ll still owe the amount of money you’d have paid during the forbearance period. That can be done in one lump sum or through a repayment plan, whichever you negotiate with your lender.

Sell the House

Sometimes the best thing to do is simply to sell the house. This is a great option if your home is worth more than you owe on it. Like any other home sale, you can sell your house, pay off the lender, and use the rest of the profits however you wish. If you’re underwater on your mortgage, however, your lender will have to agree to a short sale. Either way, don’t delay. The faster you sell your house, the easier it is to avoid foreclosure.

Foreclosure isn’t something you want to take lightly. It can have a lasting impact well after the home is no longer yours. It hurts your credit score, making it harder to get a loan in the future (which makes it more difficult to buy a new home later on). You could also see a deficiency judgment levied against you. It could even hurt your future job prospects, depending on the industry you work in. Take measures to avoid foreclosure if at all possible so you can avoid its negative ramifications.

Do you need to sell your house to avoid foreclosure? Joe Homebuyer of Dallas is ready to make you an offer! Click here to learn about our cash home buying process today!

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