If you think you are going to lose your home to foreclosure the most important thing to do is talk to your financial institution. Communication and information are the keys to keeping your home.
Your financial institution will be able to offer you the most help. Don’t let them intimidate you. You may be having a hard time, but so are they. They don’t want to foreclose on your home. They have too many already on their books. They are usually very willing to help you. When you talk to your financial institution you need to be prepared. Know what your options are.
This is the first thing you should talk to your financial institution about. If your difficulty is temporary this may be enough to get you out of the hole. If the situation is more serious this can help until you find a better solution. Depending on your situation and your financial institution your payments could be deferred for up to a year. This is a great solution if you are trying to rent or sell your home.
Modifying your loan
Financial Institutions are being encouraged to modify loans for their customers to make it easier on them to make the payments. You may be able to get your interest rate modified enough to make your payments manageable. Some financial institutions will even modify the term on the loan. So if you have a 20 year term on your loan, you may be able to stretch it out to a 30 year term. Modifying your term depends on your home appraising for the loan value. Sometimes your financial institution will charge fees for modifying your loan. Make sure you find out ahead of time what they will be charging. You may be able to have the fees added onto the back end of the loan.
If you can refinance for a lower interest rate or a longer term this is a good way to go. Your home will have to appraise for the loan value. You may also have to pay closing costs or points, but if your payment goes low enough it may be worth paying the fees. Remember when you refinance that you need to know all of the terms. Make sure you know if your interest rate is variable or fixed. Or if it is fixed for a certain length of time and then becomes variable. The payment isn’t the only consideration.
If none of these options will work for you with your financial institution then you should look for outside help. There are many agencies that will help you refinance or modify your loan. Before you decide which company you want to use you should check them out thoroughly. Make sure you know exactly what they are offering, what they want in return and what they will do for you. There are many people ready to take advantage of you, so do your research.
A good place to start is makinghomeaffordable.com. This website gives you information on foreclosure rescue scams as well as refinancing or modifying your loan. It will guide you through the eligibility process and answer all of your questions. It may extend options to you that you don’t have anywhere else.
If you are going to lose your home, don’t sit and wait for it to happen. Be aggressive. Look at your options and find the one that suits you best. There are ways to save your home if you want to bad enough!