You Can Avoid Foreclosure
Debbie WilsonLoanBiz Columnist
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.
