If you are about to lose your home to foreclosure, you may be searching desperately for a solution that will allow you to save your home. I wish I could tell you the task you face is easy, but it isn’t. You may be facing an uphill battle, but there are three ways that you might be able to stop foreclosure on your home.
The first method you can use to stop foreclosure on your home is to refinance your mortgage. When you refinance, you get a new loan to replace the old one, and the original mortgage is paid off. If you are able to refinance your home, your old lender will have to stop foreclosure proceedings because you no longer owe them any money. Your mortgage is now with the new lender.
If you want to try refinancing your home, it is best to do it as soon as you know you are going to have problems keeping up with your payments. You will have a better chance of qualifying for a new mortgage loan if your credit report still shows you up-to-date on your current mortgage. Time is of the essence when considering this method. It works best as prevention.
Another option to stop the foreclosure on your home is to file for bankruptcy. The type of bankruptcy we are talking about is chapter thirteen bankruptcy reorganization. It is sometimes possible to use this type of bankruptcy to come up with a debt repayment plan that allows you to stop the foreclosure process and keep your home. This will have an adverse affect on your credit report though. The bankruptcy can remain on your credit record for up to ten years.
However, if your main goal is to keep from losing your home regardless of what happens to your credit, bankruptcy reorganization may be a possible solution for you. It’s important to find a good bankruptcy attorney with experience in foreclosures if you are considering this possibility. You can discuss your case with the attorney to get his or her opinion and go from there. Many attorneys offer free consultations for bankruptcy cases since it is such a competitive field.
A loan modification is the final option for stopping foreclosure. You may be able to get your mortgage holder to agree to accepting modified terms on your mortgage. This benefits the lender because they avoid the legal fees associated with foreclosure, and it benefits you because the new terms will make it easier for you to keep up with your payments. Your best chance for a loan modification comes after you have fallen behind on your payments but before the lender has started formal foreclosure proceedings.
Negotiating a loan modification can be difficult, but there are experts available who can help you get your loan modification approved. If you are a do-it-yourself kind of person, you can purchase a book that tells you what to expect and explains how to fill out the forms that your lender will require.
These three techniques for stopping foreclosure all have pros and cons. You should investigate each option thoroughly before deciding on a course of action. The method you choose will depend on how far along in the foreclosure process you are and whether your ultimate goal is to keep your home or salvage your credit the best you can.
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