There aren’t many things worse — at least when it comes to your finances — than finding a foreclosure notice in your mailbox. While it doesn’t mean the bank is repossessing your home right now, they’re heading down that path.
While panic is sure to set in, take a deep breath and remember one thing: there are options available to you.
With more than one way to stop the foreclosure process, there’s no guarantee that you’ll lose your home to the bank. And that’s why you need to look into all your options, including refinancing your mortgage.
If your mortgage rate is too high, it can result in a payment you can’t afford. The same holds true if you’ve purchased a home that’s out of your price range. Either way, you’re stuck with a payment that’s bogging you down financially.
Here are some of the many benefits of refinancing your mortgage:
- Lower monthly payment: When you stretch out the term of your mortgage, you can reduce your monthly payment. And when you do that, it’s easier to stay current. For example, if you have 20 years left on your mortgage, you could refinance to a 30 year mortgage.
- Lower mortgage rate: If you’re facing foreclosure, your credit rating may be less than desirable. However, even if that is true, you may still qualify to refinance at a lower mortgage rate. Just the same as a longer term, this will reduce your monthly payment. If you combine the two, you may be surprised at just how much money you can save each month.
- A fresh start: For instance, your mortgage lender may allow you to add back payments to your new loan. And depending on how much equity you have, you may also want to consider using it to pay down some of your other debts.
Nobody wants to lose their home to foreclosure. Not only does it affect your living situation, but it does the same to the overall health and well-being of your finances.
If you’re struggling to make payments or have already fallen behind, now’s the time to learn more about refinancing your loan. It’s not the only way to prevent foreclosure, but it’s a strategy you should definitely keep in mind. It could be just what you need to regain control over this part of your life and finances.
Do you have any experience refinancing your mortgage to avoid foreclosure? Share your approach and outcome with the rest of us!