The housing market is showing signs of recovery, but many people are finding themselves ‘upside down’ on their mortgages. When you are about to default on your mortgage, you have a few options that may allow you to keep your home. Below, you will find additional information on the various ways to prevent foreclosure.
Refinance with HARP: Most refinancing options are only available to those with sufficient home equity, which is becoming a rarity. The Federal Home Affordable Refinance Program allows homeowners to refi into a 15 to 30-year fixed rate mortgage. You may not see lower payments immediately, but you’ll steer clear of interest rate hikes in the future.
Lower your payments with HAMP: The Home Affordable Modification Program is a government-sanctioned option that allows you to lower your first mortgage’s monthly payment to just 31% of your income before taxes.
Negotiate with your lender: The government programs are very attractive, but some homeowners don’t qualify for a variety of reasons. Even if this is the case, you may be able to negotiate with your lender if they’d rather keep you in the home than go through a lengthy foreclosure. If you’re going it alone, you should hire a housing counselor or a foreclosure prevention specialist. These professionals can negotiate on your behalf, explain the available options, and help reassure you in a tough time.
Consider bankruptcy: If you can’t negotiate with your lender or be approved for a government program, your next option may be Chapter 7 or Chapter 13 bankruptcy protection. Chapter 7 quickly eliminates credit card debt, freeing more of your income to be applied to mortgage payments, and Chapter 13 gives you time to catch up while lowering secured payments.
Take the case to court: In some cases, procedural or paperwork irregularities allow homeowners to challenge their foreclosure cases in court. Taking the case to court is a last-ditch effort to prevent a Foreclosure in Royal Palm Beach , to be used only after negotiations have fallen through.
Foreclosure is a difficult experience even under the best of circumstances, and the financial consequences can last for years. If you need help with foreclosure prevention, call an attorney or housing counselor today.