How to Save your Home from Foreclosure - Options
- Reinstatement - pay all back payments plus fees.
- Forbearance - make a modified set of smaller payments or stop payments for a few months while you improve your financial situation.
- Loan Modification - change the terms of your loan. This may cost you more over time due to longer payment terms, higher interest rates, and fees.
- Partial Claim - your lender might allow you to apply your late payments to the end of your loan if you can resume normal payments.
- Refinance - it's harder to get another loan if you are already in foreclosure, but a refinance may be able to adjust your payment schedule to meet your current situation.
- Redemption - in some states, even after your home has sold through the foreclosure process you might have the opportunity to buy back your home if you pay the entire balance due on your mortgage plus fees.
Other Foreclosure Options
- Sell - you can try to sell your home before the foreclosure sale date.
- Deed-in-Lieu - you can give your home back to the mortgage company without going through the foreclosure process. This will still reflect on your credit and it is easier on the lender because they don't have to go through the process either.
- Bankruptcy - a last resort. Not good for your credit and if you miss one payment on your mortgage, the foreclosure process starts again.
- Foreclosure - you can allow the foreclosure process to run its course. This is extremely damaging to your credit and can be very painful and frustrating.
Examine all of your options carefully in order to make the best decision for you and your loved ones. When considering any of the options, be sure to ask your lender what the consequences will be for any action you take. Also, acquaint yourself with the foreclosure laws in your area as they vary from state to state. Some options that can save your home could end up costing you a vast amount of money over the long term in fees and interest.
Some options will only stall the foreclosure process but won't save your home if you can't fulfill your end of the bargain. For example, forbearance will only work if you can afford to meet your new payment terms. If you cannot meet the terms and default, the foreclosure process begins again. Being informed and being cautious are the best ways to protect yourself when faced with foreclosure.