| One of the most devastating things that can | | | | of them are more willing to work with you when |
| happen to you and your family is the loss of your | | | | you come to them as soon as you think there |
| home due to foreclosure. Not only does it leave | | | | may be a problem than if you wait. This shows |
| you and your family without a place to live but it | | | | you are serious and proactive about maintaining |
| also creates a series of negative impacts on your | | | | your commitment to paying off your debt with |
| credit that can follow you for years. There are | | | | them. |
| however a few things that you can do in order to | | | | It also makes it easier to obtain certain types of |
| avoid foreclosure and keep that black mark from | | | | loan modification such as the refinancing. Many |
| making its way onto your credit. While it will not | | | | times refinancing can provide you with smaller |
| prevent some damage from occurring, it can help | | | | payments and a lower interest rate making it |
| to keep the damage at a minimum. | | | | easier to manage on a reduced salary or during |
| The first option is the short sale. This is where | | | | times of financial crisis. It also can help prevent |
| you sell the house for what is left of the | | | | widespread damage to your credit as well as help |
| mortgage. You do not obtain any benefits from | | | | you pay off bills and ease some of the overall |
| this. IN other words, many people receive a lump | | | | financial burden you may be facing. |
| sum of cash in addition to paying off their existing | | | | Being proactive is the best thing that you can do |
| mortgage when they sell a home. This does not | | | | to avoid foreclosure. Consider loan modifications |
| happen with a short sale, short sales are merely | | | | first, these are usually easier to obtain than any |
| designed to pay off the existing debt. | | | | other form of assistance. If you still have |
| They are designed to sell the house for as much | | | | difficulties after this or if loan modification is not |
| as possible. In some cases, this may not pay off | | | | an option for you consider, a forbearance if one is |
| the entirety of the mortgage. Short sales are | | | | offered in your mortgage contract, most of the |
| designed to sell quickly though they do have | | | | time you will have some kind of option along |
| significantly more paper work because banks are | | | | these lines. |
| involved than if you were simply selling the house | | | | Finally, if all else fails consider a short sale. This will |
| through a real estate agent. | | | | sell your home quickly and allow you to retain |
| A forbearance or forbearance agreement may be | | | | your credit score, for the most part, the reason |
| possible as well to avoid foreclosure. This is an | | | | being is that short sales usually occur after a |
| agreement that stops payments for a specific | | | | person has experienced significant damage to |
| length of time to allow you to get back on your | | | | their credit; however, you will not have a |
| feet and begin making payments again. This is | | | | foreclosure which is more damaging than simply |
| usually done only in certain circumstances and only | | | | having missed payments and delinquencies. It also |
| if you meet the criteria. You should check to see | | | | will show that your mortgage was paid off in full |
| if you qualify for a forbearance as soon as you | | | | provided you are lucky enough to short sale your |
| experience difficulties. One instance where a | | | | home for the remainder of your mortgage. If not |
| forbearance may be granted is when a person in | | | | you will still be responsible for the balance. |
| the household dies. For example, if the house was | | | | However, this balance is usually reduced |
| being paid off a single income and that income no | | | | significantly and repayment options are usually |
| longer exists, a forbearance may be granted to | | | | available. |
| allow the other party time to get a job and begin | | | | In order to avoid foreclosure follow these steps, |
| making payments. This is just one example, check | | | | review your mortgage document for information |
| with your lender about the various qualifications | | | | regarding what you can do in times of financial |
| necessary for obtaining a forbearance. This should | | | | need. Talk with your lender or with other lenders |
| be done when you initially set up your mortgage | | | | about refinancing options as well as the options |
| but the information should be available to you at | | | | available for loan modifications. Do this step as |
| any time. | | | | soon as possible, do not wait as waiting may |
| A loan modification is another way that you can | | | | cause loan modification to be removed from the |
| avoid having to face a foreclosure. Loan | | | | list of available options. If this is not an available |
| modifications are designed to create a series of | | | | option consider a forbearance if you meet the |
| creative financial options that allow you to make | | | | criteria. Being repayment as soon as possible and |
| payments on your loan but at a reduced amount | | | | do everything you can to repair your credit or fix |
| or on a different schedule. It may call for a | | | | the problem. Forbearances usually have a time |
| reducing in interest rate, payments, it may allow | | | | limit. This can be three months, six months or a |
| for payments to be made on a weekly or to be | | | | year. |
| made every other week. Refinancing is one form | | | | Finally, if nothing else works short sale as soon as |
| of loan modification. | | | | possible. This means that your home will be on |
| There are other types but the important thing is | | | | the market for a longer period of time enabling |
| to contact your lender as soon as possible before | | | | you to obtain the price you want. Rushing a short |
| you start having serious issues and works out a | | | | sale usually means you may end up short when it |
| plan to help you avoid foreclosure and stay in | | | | comes time to pay the bank. |
| good standing with your financial institution. Most | | | | |