When tragedy strikes, your personal life may stop but the rest of the world continues on. Getting behind on your home loan or mortgage can quickly turn into a foreclosure without any action on your part. Even though there are many different programs and ways to help save you from foreclosure, if you are unaware of your options you may miss the chance to save your home and your credit.
It is important to pay close attention to the default letters your lender or mortgage provider sent to you by. Do not wait until you have a shoebox full of them before seeking help.
If you are facing a foreclosure on your property, there are a few types of programs to help you keep your home. The first are government programs, including loan modification to lower your payments, interest, or balance due. Another program is designed for a property value that is less than the amount owed for it. However there are certain requirements that must be met in order to qualify for a governmental program, including income.
Another option is a traditional refinancing program. If you have a stable income and good credit, a lender can offer you a new mortgage with a lower interest rate in hopes to reduce your monthly payments to a more manageable amount. In this program, your house must appraise for the refinancing amount.
A third alternative that will not let you keep your home but can prevent your credit from plummeting is simply giving the house back to the lender. In this, you sign a Deed in Lieu of a Foreclosure and turn the home over. In some instances, the lender may allow you to continue living there if you agree to rent it. There still may be required payments after giving the house to the lender if the value is worth less than the mortgage owed. If that is the case, which is called a deficiency balance, it could cause more problems for you in the future because you will have to pay that balance.
A last program you can try is declaring bankruptcy. Though this declaration will not remove your obligation to pay your mortgage, it can get rid of other bills, credit card payments, and other costly monthly bills. The premise behind this program is that with those other bills out of the way you can focus exclusively on payments for your home. Bankruptcy can damage your credit score and stays on your credit report for a long time after, so take care when weighing this option.
Having foreclosure looming over your home is very stressful, especially if you do not know where to go to receive help. Contacting an experienced lawyer to help you choose which program is right for you will help relieve some of that anxiety. Seeking the assistance an attorney will give you the best possible outcome to avoid foreclosure with the least damaging effect to your credit. Contact the Law Office of Michael A. Siddons today for help at (610)255-7500.