Millions of Americans are facing foreclosure these days and they simply do not know where to turn or how to halt the process. While there are many cases where a foreclosure may be too far into the process to stop it, there are some things you can do if you are in danger of foreclosure in the early stages of the process. Try some of these alternatives before you decide that it is a lost cause.
- Temporary Rate Reductions
With interest rates as low as they are, there may be a good chance that you can convince your lender to lower your rate temporarily. A lower rate would result in a lower payment and the difference in your monthly payment would depend on your mortgage rate at the beginning of the loan and the current mortgage rates in the market. It may not be a significant reduction, but it may be that extra little bit that helps you make your payments for the next few months.
- Payment Deferments
If you are experiencing a temporary financial hardship, you may be able to defer your payments for a month, two months or even longer depending on your situation. But deferred payments are typically for borrowers who are current on their mortgage payments. Don’t wait until you fall a month or two behind on your payments before you contact your lender and ask for a deferment or else you probably are not going to get this extra help that you need.
- Loan Term Extensions
Extending the term of your loan means that you will be paying longer on your loan and you may be paying more in interest, but your payments will be smaller each month. If you are having financial difficulties, this can be a great temporary fix. Once you have gotten back on track financially, you can refinance or do what you need to do in order to pay off your loan on your previous schedule or even faster than originally planned.
- Get Federal Help
The federal government has several programs, including the Making Home Affordable Program, designed to help troubled homeowners who are facing foreclosure. At the first sign of financial trouble, start researching which federal programs will fit your particular situation so you know where to turn in case you need to slow or halt the foreclosure process.
If you are facing financial troubles and you think you are going to miss a mortgage payment or several mortgage payments, the best thing to do is consider the options available to you right away. The longer you wait, there less options available to you as lenders typically prefer to work with people who are current on their payments. After missing a couple of payments, you will be in a predicament that you may not be able to get out of. Even then, however, you should still be able to get some sort of help, but you will not know what is available if you do not try.