Have you missed a mortgage payment and fear that you may begin to miss more? If this has happened to you or your think it will soon, you should immediately start taking steps to save your home from foreclosure. One positive thing you have working on your side is that your mortgage lender does not want you to lose your home either. Many times, they will work with you to make sure you can stay in your home. However, you should act quickly and become knowledgeable about foreclosure and what your options are. Here are some things you can do to help prevent foreclosure from happening to you.
Gather your loan documents and learn your mortgage rights
If they are not already together, you should get all your loan documents and put them in a file. This includes mortgage and escrow statements, property tax and insurance information and any correspondence with your mortgage lender. Once gathered, take time to read all the documents to understand what happens with missed payments. Typically, under federal law, a mortgage lender cannot begin a foreclosure until you are over 120 days delinquent.
Understand your options
There are options available to you on a temporary or permanent basis that can help you avoid a foreclosure. Here are a few:
- Loan modification – Getting a loan modification will make a permanent change to the terms of your loan. This can range from lowering your interest rate to extending the time to pay off the loan. You may be able to put past due amounts into the mortgage and get a fresh start.
- Repayment plans and forbearance – If your lack of making a mortgage payment is only temporary, you could be eligible for a forbearance agreement. A forbearance means the lender will either suspend or reduce your mortgage for a certain amount of time. During this down time you will be able to get caught up on missed payments.
- Refinance your loan – If you are not yet behind on payments, you can check into refinancing your mortgage through another lender or even a government program
Call your mortgage lender
If you have missed a mortgage payment or know you are about to, do not procrastinate in contacting your loan servicer. The earlier you contact them the better chance you will have to qualify for an alternative to foreclosure.
Sell your home
If you are worried about foreclosure and don’t believe any of the above options may work, you can try selling the home or let the lender take over the home. If there is equity in the home, you should be able to pay off your mortgage after a sale. If you owe more money on the home than what you can sell it for, you should talk to your lender about conducting a short sale.
If you are worried about falling into foreclosure and think it is inevitable with your current situation, you should start working on saving your home immediately. Just know there are options available and you do not need to think of it as a dire situation.