Falling behind on your mortgage payments can happen to anyone. Whether because of a lost job, unexpected expenses, or any number of other things, you can find yourself facing foreclosure surprisingly quickly. If your mortgage company has notified you that they are looking to foreclose, or you believe you may be facing it soon, it is important to know your options. If handled correctly, you can emerge from this troubling experience in a strong and financially responsible way.
Short Sale
A short sale may be a good option if you owe more on your home than it is currently worth and you aren’t really interested in keeping it anyway. If approved by your mortgage company, you can sell your home for as much as you are able to get, and the mortgage company will accept it with you owing nothing further.
Bankruptcy
If you file for bankruptcy protection, the foreclosure process will be halted until your bankruptcy is discharged. When going through this process, you can likely keep your home and even work with the mortgage company to help come up with a new payment and interest rate that will allow you to keep the home with a monthly payment you can afford.
Refinancing
In most situations, refinancing as a way to avoid bankruptcy will be difficult since your credit score is likely already suffering from being behind on payments. If you still have a strong credit score, however, refinancing can be an effective way to “buy” yourself some extra time and reduce your monthly payments.
Loan Modification
Loan modification programs are still available in many areas and can be an ideal solution to avoiding foreclosure. There are many different programs out there offered through government programs as well as mortgage companies. You may be able to negotiate a modification that will allow you to reduce your interest rate, put any back payments owed at the end of your mortgage, or even reduce the principal owed. Many people qualify for these modifications, and if you do, they may be the ideal solution to your situation.
Proceed with Foreclosure
Most people assume they want to avoid foreclosure at all costs, but that is not always the case. If you don’t want to stay in your home anyway, simply proceeding with the foreclosure process may be a good option. In most cases, foreclosures will take anywhere from 6-12 months to complete. Since you will be losing your home in the end anyway, you can take this time to save up the money that would have gone toward mortgage payments and use that to secure a nice apartment, condo, or other living options. While the foreclosure will hurt your credit, you can put yourself in a good position to help it recover.
Don’t Face Foreclosure Alone
The foreclosure process is a part of the legal system and not something you want to face on your own. While the mortgage company will likely try to make you feel like you have to work directly with them, it is often better if you have an attorney there to represent you. A good attorney can help you find the best possible option for your situation and negotiate the right outcome. Contact Annette Sanchez Law to discuss your foreclosure and what you can do next.
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