Avoiding Foreclosure - Are you Avoiding Foreclosure?

If you are already in the midst of a foreclosure process, you are likely very frightened and afraid. This is perfectly normal and natural. However, this is not the time to allow your fear to control you; if you do then you are likely to have several hard and difficult choices to make. If you are just beginning the foreclosure process you have several options that will help you to resolve the situation and get back on track.

First – and this may seem the most obvious but it does skip some people’s minds in the emotional roller coaster ride that foreclosure brings – pay your mortgage. Whatever amount you are past due, pay it. Some people have the ability to do this from funds in an emergency account, by cashing in a retirement account, or by selling stocks. Do not worry about hanging onto all of the money for your future if that money will help you save your home now. Remember, without a home to live in the money you save for retirement will not do much for you. Cashing in these often forgotten sources of cash is a great way to quickly come up with the money needed to satisfy your lender and stop the foreclosure process.

Another option is to look at the various assets you have around you. If you have anything that you can sell that would provide ample money to satisfy your lender then you should strongly consider selling it. While it is never pleasant being forced to sell assets, it is much less painful than being forced from your home during a foreclosure. Selling some assets could quickly help you raise the funds you need to catch up missed mortgage payments and even possibly allow you to get a bit ahead as well.

Another option to consider is discussing with your lender a repayment plan. If you have been ducking and hiding from your lender they are not as likely to work this out, but it is still possible to do and asking surely won’t hurt anything and may help you immensely. In a repayment plan, make sure you never agree to repay more each month than you can actually afford or you are just postponing your foreclosure problem not solving it. If you can only afford to pay an additional $200 per month, never agree to pay more than that unless you are sure you will be able to cover it.

If you are in the process of trying to sell your home to stop the foreclosure process your lender may be willing to suspend the foreclosure for a specific period of time to allow you to sell the home. This usually comes with a limitation on how long they are willing to wait for a sale, but it will allow you time to try to sell the property and satisfy the mortgage rather than the home being foreclosed upon and your credit taking a huge hit. This is best negotiated if you have a real estate market that is starting to grow, rather than a market that is oversaturated with homes for sale on the market.

Another option that you can explore is a refinance. If you have good credit, and you have enough equity built into your home, refinancing can save you money each month. Do not worry about refinancing to pull equity out of your home unless you really need to; instead worry about paying off the defaulted mortgage and lowering your interest rates as well as monthly payments. If you are able to do a refinance, you are typically able to save quite a bit of money each month. If however, you find that you are in the position of owing more for your home that it is valued at, your chances of finding a mortgage company willing to do a refinance for you are very slim. Have your property appraised and compare this appraisal to exactly what is owed so that you can get a good perspective of your chances for a refinance.

With some research and careful planning, it is possible to stop a foreclosure even once it has begun. However, it is vital to act quickly and make swift decisions. Never postpone making decisions any longer than necessary so if you are unable to work out one solution, you have some time to move onto the next option. With determination, as well as creative thinking it is entirely possible to save your home, but ignoring the problem will not help at all.