If you've recently experienced a financial hardship, you may have fallen behind on your house payments. If you have, you could be facing foreclosure, which will mean that you lose your home and destroy your credit. However, with some careful planning, your financial hardship doesn't have to end in foreclosure. Here are four steps you can take to avoid foreclosure.
Modify the Terms
If you want to stay in your home, and your financial difficulties are a short-term issue – you should talk to your lender about modifying the present terms of your loan. Through the modification process, the lender may be able to alter your mortgage and provide you with terms that will be more affordable for you. This will allow you to remain in your home and avoid foreclosure.
Arrange a Cash Purchase of Your Home
If you're ready to get out of your home before the foreclosure proceedings begin, you may want to consider a cash sale. There are many investors who will purchase your home for what you owe. While you might not make any money for yourself in the deal, you will be able to walk away from your home with the mortgage paid off. This is a good way to go if you don't have a large mortgage that will need to be satisfied.
Consider a Lease Option
If you've been unsuccessful in having your loan modified, and you haven't been able to secure a cash sale of your home, you may be able to get your lender to agree to a lease option on your home. With a lease option, you'll lease to someone who wishes to eventually purchase your home. A portion of the lease payment will go in an account to be used as a down payment later on. The remaining money will be used for the mortgage payment. It's important to note that you must obtain approval from the mortgage company before you can enter into a lease option agreement with a potential buyer.
Request a Deed in Lieu
If your home is about to go into foreclosure, you can discuss a deed in lieu with your lender. A deed in lieu allows you to sign ownership of your home back over to the lender. Once the lender agrees to a deed in lieu, you will no longer own your home and the foreclosure process will stop.
If you're in danger of losing your home, you need to know that there are options available to you. The suggestions provided here will help you avoid foreclosure on your home. To learn more, contact a company like TW Homes.