If you can’t make an upcoming mortgage or bill payment, DON’T PANIC! You are not alone, people face this issue every day, and there are ways to prevent further issues such as foreclosure. With this in mind, we are going to look at seven ways to avoid foreclosure.
1. Contact Your Mortgage Lender
The minute you find out you can’t make a mortgage payment, you must contact your mortgage lender. Explain the situation and give details such as income, expenses, and savings.
2. Loan Modification
Your lender can adjust your loan if need be to make your monthly payment more affordable. Be aware this might extend the amount of time it takes to pay off your loan. Additionally, make sure you can afford the new monthly payment, so your home doesn’t fall into mortgage delinquency again.
3. Repayment Plan
The lender can offer a restructured payment plan to get you back on track over a set period. It will require slightly larger payments every month, but it doesn’t reduce the total amount you owe.
This option is only used for severe hardships such as natural disasters, job loss, or illness. Forbearance allows you to make lower mortgage payments for some time or even skip a few payments.
5. Short Sale
By short-selling your house, you agree to sell it for less than the amount you owe on your mortgage. After the sale, your lender may or may not be able to enforce your obligation under your mortgage for the difference, depending on the laws where you live and the terms of your mortgage. You should request your lender to agree in writing to waive any deficiency.
6. Deed-in-Lieu of Foreclosure
Deed-in-lieu of foreclosure means you sign your house over to the lender and walk away to avoid foreclosure. Like a short sale, if you do this, you should request your lender to agree to the terms in writing, so you’re not obligated to pay any costs after leaving. You can also ask about the “cash for keys” program, which can help you pay for relocation costs.
7. Sell Your House for Cash
Selling your house for cash is also an option to avoid foreclosure. This option allows for a quick sale and frequently may net you enough to cover your debt and a little extra to start over. If you decide to look into this, we have another article on this topic that you should read. It goes through 5 reasons to sell your house for cash in 2022.
If you’re worried about foreclosure and need assistance, please give Flash Realty Solutions a call. We work to find solutions for Houston homeowners every day, dealing with various challenges. So contact us or submit an inquiry to set up an appointment with one of our experts. Owning a house is no easy task, and we want to help you in any way we can!