When you buy a home, you assume that you’ll make all your payments in full and on time. You also assume that you’ll eventually pay off your home, allowing you to live mortgage free.
Unfortunately, your financial situation has the potential to change at any time, which can throw you for a curve on many fronts.
If you have received a notice of foreclosure from your mortgage lender, it’s critical that you take immediate action. Hiding and hoping for the best is not the right approach.
How to prevent foreclosure
On the plus side, there are many ways to prevent foreclosure. You should consider all of your options to ensure that you head down the right path.
Refinancing is something to strongly consider. Here’s why:
- You can expand the term of your loan, thus lowering your monthly payment.
- You can do so with the idea of catching up on back payments.
- You may be able to secure a lower interest rate, which also reduces your monthly obligation.
There are three issues that could stand in your way:
- You are so far behind on your mortgage payments that refinancing may not be possible.
- You have bad credit, which makes it difficult to find a lender who is willing to refinance your loan.
- You are underwater on your home, meaning that you owe more than what it is worth.
Even if you’re facing one or more of these potential problems, it’s still best to contact your lender to discuss your options.
You may find that they can help you refinance your mortgage. You may also find that there’s another option available to you.
Keep an Open Mind
Many people get themselves into trouble because they don’t keep an open mind. For example, they don’t want to refinance their mortgage because it will add to the number of years they have to pay it off.
Even though it’s not the ideal situation, it’s better to take action than to let the bank foreclose on your home.
A notice of foreclosure isn’t something you want to find in your mailbox, but if you slip behind on your mortgage payments it could happen.
Should this happen, don’t hesitate to call your lender, discuss your options, and create a plan of action. This could lead you down the refinance path.
Do you have any experience refinancing your home to prevent foreclosure?