There are, however, steps that can help you prevent foreclosure from happening. Below are the hints that you need to consider.
When you are stuck on repaying your mortgage loan, one thing you can do is negotiate with your lender. The negotiation will help you reduce the loan terms that you had agreed upon when signing the agreement.
You are eligible to enter this agreement only when you are facing financial constraints on paying the loan. For example, it could be a medical emergency or sudden income reduction.
By filing for bankruptcy, you will be delaying the foreclosure process. You could either file for chapter 13 or chapter 7 bankruptcy.
When you have considered all the available options yet are not working to your benefit, selling your home is the last resort. You will have to sell the lender your house even though it does not cover the entire outstanding balance.
Request for a Loan Modification
When you are stuck on repaying your mortgage loan, one thing you can do is negotiate with your lender. The negotiation will help you reduce the loan terms that you had agreed upon when signing the agreement.
When requesting a loan modification, you want to either reduce the monthly interest rate or request an extension of your loan term. It, therefore, ensures that you do not struggle to pay for the remaining loan.
Forbearance Agreement
You are eligible to enter this agreement only when you are facing financial constraints on paying the loan. For example, it could be a medical emergency or sudden income reduction.
You will, therefore, need to prove to your lender the situation that you are currently in, as this will increase your chances of the forbearance is granted. During this period, you should regain your financial stability hence can, after that, pay for the mortgage loan without trouble.
File for Bankruptcy
By filing for bankruptcy, you will be delaying the foreclosure process. You could either file for chapter 13 or chapter 7 bankruptcy.
To know which is best for your current financial position, it would be best that you consult with a bankruptcy attorney. However, you should note that the lender has the authority to get full payment for the mortgage loan if your request for bankruptcy is suspended.
Due to this legal move, you will have created a negative credit score, which means that you will not qualify for refinancing.
Consider a Short Sale
When you have considered all the available options yet are not working to your benefit, selling your home is the last resort. You will have to sell the lender your house even though it does not cover the entire outstanding balance.
Before you proceed with this option, it would be best that you consult with your lender to know whether they agree with your plan.
To ensure that you do not get into this situation, it would help if you do not accumulate your debt. However, if it is inevitable, ensure to go through the options above to know which would be helpful to you.
To ensure that you do not get into this situation, it would help if you do not accumulate your debt. However, if it is inevitable, ensure to go through the options above to know which would be helpful to you.
