A foreclosure is a difficult concept to think about as it may cause you to lose your home. The damage that it may cause to your credit rating can especially be threatening. Luckily there are many alternatives that you can utilize to avoid a foreclosure.
A loan modification is a program that allows you to adjust the terms that are featured on your home loan. It may be adjusted to have your delinquent payments added to your original loan while utilizing a fixed rate that may be lower than what you originally had. Still, whether or not you will be able to qualify for a loan modification will be based heavily on the additional forms of debt you hold.
Refinancing is a different alternative to foreclosure than a loan modification as it entails getting a completely new loan. A new loan will pay off the old mortgage loan in this case. You will then be responsible for paying off the new loan. This loan may come with terms that are more favorable to your needs.
A partial claim will allow you to get an interest-free loan to assist you in making your loan current. The lender will take in less than what you owe but the loan will still be considered current after the partial claim is fully paid off. Not all lenders will accept this alternative to foreclosure but they will often accept it simply as a means of reducing their losses. They know they will not lose as much money off of this as what would be lost in a foreclosure.
A repayment plan will allow you to create a new schedule for how you will pay back your mortgage loan. You can devise a plan with your lender to make regular monthly payments and then add an extra amount of money to it each month. This may assist you in paying back the amount money that you are delinquent for.
A forbearance plan will allow you to either temporarily reduce the amount of your monthly payment or even suspend your payments. The payment value that you will owe will be increased later on. This is done to help you prepare enough money to actually pay off the delinquent amount that you owe.
If you or someone you know is facing potential foreclosure contact SM Law Group today.