Many homeowners today who find themselves in a money crunch are desperately looking for a way of stopping foreclosure on their homes. Here are some tips that may help.
The one rule to always follow is to stay in contact with your lender. Whether you are one month, two months, three months or more behind in your payments - it doesn't matter. Stay in contact with them and let them know what is going on with your financial situation.
Many times your bank will have special, unadvertised programs that have been set up with the express purpose of helping people who are having trouble making payments. A perfect example is the foreclosure bailout program which some banks are involved with. The only way to find out about these programs, however, is to stay in touch with them. So don't ignore notices or phone calls from them. Get back to them right away.
Many times if you are less than 60 days behind, the bank or lending institution will have a grace period in which you can pay the amount in arrears and stop the foreclosure proceedings. Of course, this means that you must quickly come up with the 2 or 3 months rent, plus penalties, to get the loan current.
Making Use of Bridge Loans
If your credit is relatively good, with the exception of your mortgage payments that are in arrears, you may be able to get an unsecured bridge loan to tide you over. This will at least stop the foreclosure proceedings and let you stay in your home. Another alternative is to reach out to relatives and friends and try to borrow enough to make up the difference. And, as a last result, if you have a line of credit on your credit cards, you can use this to catch up - even though the interest rate is no doubt higher than you will have to pay elsewhere. But, at this point, if the goal is keep your home, you may have no other choice.
Many people are too proud to take charity. But if your family is about to be thrown out into the streets, maybe you should drop a bit of your pride. If you are a long standing member of a church, many times the pastor or priest is willing to ask the congregation to donate funds to help you stay in your home. Likewise, many communities have non-profit organizations that have various programs to help people in need.
Another way of stopping foreclosure is to ask your bank if it has a loan modification program. If so, they may be willing to bring your loan up to date with a token payment from you and restructure your loan with payments that are easier for you to handle. The key to getting approved for a loan modification program, however, is after you are behind in payments but before they have started foreclosure proceedings.
There are various other things that you can do as well. By keeping a conversation going with your lender, they may be able to suggest various options of stopping foreclosure.
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