Are you are a homeowner facing foreclosure? There are several options available to you before buyers and investors line up to purchase your home at auction. Getting out of foreclosure might sound difficult; however, the first step in saving your home is to pick up the phone and call your existing lender.
Here are several tips to help get you back on the right track financially and save your home.
A common homeowner mistake is to not ask the mortgage lender for help; however, it might surprise you to learn that you can easily renegotiate your payments with the lender. Lenders want to avoid foreclosure as much as you do…renegotiating could be the best option for all parties concerned, you just have to ask.
Renegotiating is helpful because you are taking control of your finances and it demonstrates to the lender that you plan to keep the mortgage in place. Many people don’t realize that the lender has no interest in taking your home back; foreclosure is an expensive no-win situation for everyone. Your lender only wants your payments to be made on time to avoid default.
Depending on your financial situation the lender could be required to work with you make up your missing payments with a forbearance agreement. Mortgage forbearance agreements are a special payment plan set up by your lender to help you avoid foreclosure. To request one of these plans you should contact your lender’s customer service and ask for the forbearance agreement department.
Mortgage forbearance agreements serve to reduce or postpone your mortgage payments for a specific period of time. While your payments on the loan are deferred to give you time to catch up, you will still accrue interest on the loan during the forbearance period. When your forbearance is over this interest will be added to your loan balance. Forbearance can be a great way to get out of trouble with your mortgage but you have to ask and be approved by your lender to get one.
Once your forbearance request has been approved by the lender they will typically not begin foreclosure proceedings or accelerate your payments. During this time you must agree not to contest collection actions taken against you if you fail to bring your payments current after the forbearance period ends. Some lenders may require you to give them the deed to your home if you fail to meet the terms of your forbearance agreement.
Once your lender approves your mortgage forbearance agreement your payments may be postponed for a period of four months or longer. There is not limit to the number of months the lender can approve forbearance; however, one forbearance period cannot cover more than 12 payments. Learning about your options when managing your mortgage can help keep you out of trouble by making informed decisions.
Remember that your lender does not want to foreclose on your home; if you’re falling behind on your payments pick up the phone and call your mortgage lender. To find out if mortgage refinancing is an option for you register for the free Underground Mortgage Videos on this site using the links at the top of this page.