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Alternatives to Foreclosure

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By : Roby Hicks    99 or more times read
We are familiar with foreclosure and we know what it can do to us. This is a process of losing rights over our property because of failure to pay the mortgage. The lender takes over it. The property usually goes to an auction so that the lender can regain what he lost when the owners stopped paying him their dues. However, this is not as easy as it sounds. The process can take more than a year and it is expensive too.

Since foreclosure does not offer any good to anyone, it is best to look for alternatives. There are different options available. One just needs to explore them. What needs to be done is for the homeowner to face the issue as soon as possible so that he can think of better ways to deal with it.

You will know beforehand if you are going to make the payment or not. If you feel that you will not be able to pay it, check your finances first. Will you be able to recover after one or two months? If you can, it might be best to borrow the needed amount from close friends or family. It is easier to negotiate with them. You can also tap in your savings or financial cushion. This is why you have to allocate amount for your financial cushion. This will help you deal with problems like this.

However, if you feel that there is no way you are going to make the payment in its current rate, talk to your lender right away. This is essential because your lender can help you with the issue on hand. The lender can allow you to skip three payments if you pay half of the delinquent amount on the fourth month and increase the payment in the following months. This will give you enough time to generate the amount needed. This is essential to pay off the delinquent payments. Your lender can offer you other options, just present your predicament well.

Some lenders are willing to modify the loan terms to help their borrower pay their dues. Financial concerns can occur, which can greatly affect the ability of a person to pay the loan. The lender can lower the interest rates or can lengthen your mortgage. This can reduce the amount you are going to pay each month. This will help if your monthly income has gone down as well.

Another option is to refinance your loan. You can do this by getting a second loan. Many do this to pay their first loan. You have to be cautious in getting a second loan though. See to it that the second loan has better terms, which will make payments easier for you. Check the rates and the terms before you agree to anything.

Your last option is to sell the house. This is better than foreclosure because you will still be able to settle your obligation and use the remaining money to start anew. However, if the value of your property has declined and it is already lower than the balance of your mortgage, then propose a short sale to your lender. This will take longer though. That is why you have to prepare all the essential requirements like the hardship letter, your financial statements and an offer from a potential buyer.
check out the Kierland Homes for Sale. There are also Desert Hills, AZ Homes and Peoria Homes for Sale you can visit.

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