Homeowners that have fallen behind on their mortgage usually don’t know where to go for help or even where to start. They never planned on getting into this position, but this is where they are and it is something that needs to be dealt with. There are typically extenuating circumstances that cause homeowners to fall behind:
- Job loss or unexpected unemployment
- Illness or sudden medical emergency
- Death in family
- Loss of income through demotion or pay cuts
- Adjustable rate payment becomes to high
Steps to Avoid Foreclosure
– Call your lender: Most homeowners are afraid to call their lenders or open mail from their lenders once they have fallen behind on their mortgage. Don’t do that. That will only make the situation worse. Once you are in contact with your lender they will give you some potential options.
– Make up payments over time
Some lenders will do a forbearance which is a repayment plan to pay back past due money over time. Typically this is an option they will offer before legal action is taken against you.
– Changing the terms of your loan / loan modification
If you have an adjustable loan your mortgage lender could freeze the interest rate or change it to a fixed rate that is more manageable for the homeowner. Other times a lender might extend the amoritization period for the borrower which extends the number of payments that will be made.
Depending on the lenders guidelines and if you have equity in the home they may offer to add the past due payments on loan and re-amortize into a new loan.
– Repayment Plans
Some lenders will allow you to spread out past due payments over a specific term. For example, if your payment is $2,000 a month, the lender might offer to add $166 per month for 12 months until you are current.
– Stopping Foreclosure
If your lender has filed a Notice of Default your options will now be limited. This is why it is always smart to call your lender when you know you will be behind on payments. Since foreclosure proceedings have started; the bank starts incurring more fees that make it more difficult to get out of the situation.
The period that they give you to make your payments current and pay any costs of filing the foreclosure and for stopping the foreclosure is called the reinstatement period. If you have not been able to reinstate your loan these are a few of your other options:
– Sell Your Home Fast
This is where we come in. As Connecticuts’ top “We Buy Houses” company we have the ability to close on a house within 5 days. Our in-house team of attorneys, title companies, and contractors work with a synergy that is unsurpassed by competitors. Sellers will often call us 1-4 weeks before their foreclosure date and need to be sure we can close on the property. We get it done. Its simple.
Don’t let the bank foreclose on your property, call us NOW to preserve what equity you have and give yourself the ability to move on with some money in your pocket. Don’t let the bank take it.
– Consider a Short Sale
If you owe more than what your home is worth, you might want to consider doing a short sale on your property. It’s a much better option than letting your property go to foreclosure, and sometimes the bank will give you money for relocation costs. A short sale will affect your credit but not nearly as bad as a foreclosure. We have a seasoned team of short sale negotiators we work with and if you are considering a short sale we can put you in contact with someone who can help.
– Deed-in-Lieu of Foreclosure
Also known as deeding the house back to the lender. This is where the deed is signed back to the bank and the lender forgives the mortgage. Typically your credit will be affected the same as a foreclosure.