In 2015, almost 1.1 million foreclosures were filed with the courts. Of those foreclosures, many of the homeowners had options available to them to avoid foreclosure. If you are facing foreclosure, here are some ways that you can possibly avoid losing your home.
File for Bankruptcy
Bankruptcies tend to get a bad rap, but filing for one can be highly beneficial for many people in certain financial situations. One of the most beneficial features of a bankruptcy filing is that the court temporarily stops all legal actions against you. Even if the foreclosure has been filed with the court, your lender cannot take your home until the bankruptcy is processed.
The bankruptcy filing buys you time to work out a payment arrangement with your lender or renegotiate your loan contract. If you file for a Chapter 13, you can incorporate your mortgage payments, both arrears and future payments, into your repayment plan.
Request a Special Forbearance
Your lender wants you to stay in your home and pay off your loan. It is because of this, lenders often make a forbearance available to borrowers who are having financial difficulties due to extenuating circumstances.
The forbearance could offer you more time to pay your arrears or even temporarily suspend your payments. Before agreeing to a forbearance, you have to provide proof to your lender that you will be financially able to uphold your end of the agreement in the future.
Apply for a Hard Money Loan
A hard money loan is one that is secured solely by property and has higher than average interest rates and fees. Although it might not be the best solution for saving your home, it is an option. When you take out the loan, you can catch up on your missed mortgage payments.
It is important for you to remember that the term period for the hard money loan is set in stone. It is imperative that you have the money to pay back the loan by the date you agreed to or you could end up in the same situation as before. This time, you might not be able to save your home from being taken in a foreclosure.
Depending on your finances, state laws, and available assistance programs, there might be many more ways that you can save your home. Work with experts, such as a bankruptcy attorney, to find the right move for your situation.