Fast Ways to Avoid Foreclosure
- One of the simplest ways to avoid foreclosure is to contact your lender and set up a repayment plan. With a repayment plan, you can take the total amount of money that you are late on and divide it by a certain number of months. You then add this amount to your regular mortgage payment until you are caught up on the loan. The lender is generally willing to offer this option if you have sufficient income to make the payments.
- Another option for you to consider is a loan modification. With this option, you contact your lender and negotiate new terms to your loan. You might be able to get a lower interest rate or a longer repayment term with this strategy. When you go through a loan modification, it will generally have a slightly negative impact on your credit score, but it will be much better than going through a regular foreclosure.
- You may also be able to secure a hard money loan to help you avoid foreclosure. A hard money loan is a loan that is provided by a hard money lender that is licensed to do business in your state. Hard money lenders regularly work with people who are in distressed situations. This is typically a short-term loan in which you make interest-only payments for one to three years. After this time period, you have to repay the entire loan balance.
- There are also government programs available if you are facing a foreclosure. The Making Home Affordable program provides the option to refinance your existing mortgage or to modify your loan. The attractive feature of this program is that it provides financial incentives to your lender to facilitate one of the two options. To get involved with this program, you must meet certain eligibility criteria such as having a loan payment above a certain percentage of your income.