When you fall behind on your mortgage payments, your home could quickly fall into foreclosure status. Your bank does not want to foreclose on your home in most cases because they will usually take a loss when selling it. Further, they will have to pay for upkeep once you move out. It also requires a lot of the bank’s time to complete the foreclosure.
However, if you don’t seek out alternatives to foreclosure quickly, the bank will foreclose on you. Here are some of the possible alternatives to foreclosure in Arizona:
— Reinstatement: You pay the bank all of the past due payments as well as late and legal fees.
— Forbearance or re-payment plan: Your lender may allow you to repay the missed mortgage payments over time or put the past due amount at the end of your loan.
— Refinance: If your credit has not taken too hard of a hit due to the missed payments, you may be able to refinance your home. Your payment, though, could go up significantly.
— Sell the property: If there is some equity in your home, you might be able to sell it and have enough money to pay off the missed payments, fees and balance.
— Deed-in-lieu of foreclosure: This is where you give the property back to the lender. If you have equity in your home, it is not usually a good option.
As you can see, there are alternatives to foreclosure, although some can be quite complicated. It is a good idea to consider legal advance before moving forward with one of these alternatives. This may help you avoid foreclosure and keep your home.
Source: Luna Realty, “Foreclosure Alternatives,” accessed May 30, 2016