You Can Avoid Foreclosure

Debbie Wilson
LoanBiz Columnist

Article Rating , 5 out of 5 based on 1 votes

Contrary to popular belief, banks and lenders don't really want to foreclose on your mortgage. That's because your money and interest are actually much more valuable to them than your home is. But that doesn't mean you shouldn't be prepared to avoid foreclosure. It can happen more easily than you might think.

Mortgage Options

If you're already in trouble and looking to avoid foreclosure, there may be several viable options available to you:

  • Short refinance - In this plan, your lender actually eliminates part of your debt and refinances the rest of the loan at a new interest rate.
  • Short sale - In this plan, your lender allows you to sell your home for an amount lower than the mortgage note owed. The lender takes the money from the sale as payment of your mortgage in full.
  • Repayment plan - As the name implies, you'll be responsible for the entire mortgage loan amount. Your lender may grant you a couple of extra months to repay the overdue balance. This option can be very helpful if you've just encountered some unforeseen financial expenses that temporarily set you back.
  • Loan change - The most drastic of all the options, this usually involves changing the entire terms of your mortgage loan in order to bring your loan balance current.

Buying and financing real estate can be one of the most exciting and challenging experiences in your life. And while everyone wants a piece of the American pie, it is important to have your finances in order, including back-up contingency plans, prior to embarking on property ventures. However, if you've already bitten off more than you can chew, remember that there is help. Many lenders will provide you with some form of foreclosure assistance. There are also lawyers who specialize in mortgage financing options for "hard money" cases.

About the Author
Debbie Wilson owns and operates a lakeside resort. Her previous experience includes profitability consulting for a national healthcare company. Debbie holds a B.A. in Business Management with a minor in Physical Education.

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