Owning your home has many advantages, and as long as you can afford the mortgage repayments each month, it is likely to be a great investment for your future. However, if you get into financial difficulties further down the line, you may be at risk of losing your home. This is formally known as foreclosure. So if you are struggling with your finances but want to do everything that you can to avoid losing your home, here are some alternatives.
Modifying your mortgage
Mortgages do not have to be set in stone. You might be able to rearrange the funds that you have paid off already to help you catch up with your loan repayments.
Your lender will always do everything that they can to make the situation better for you, because foreclosure is not a good situation for them either. Forbearance is temporarily reducing the repayments that you own, or adjusting the circumstances in some way to allow you to catch up and recover.
You can avoid foreclosure by selling your house quickly. This can mean that you will sell it for a lower price, or one less that the necessary amount to pay off your loan.
It is important to conduct careful consideration before making any big decisions about your property. The best option is always to focus on budgeting to the point where you put your mortgage repayment before any other payments. If you are facing foreclosure and would like to avoid it, you should do adequate research and consider all options.
Source: Findlaw, “Alternatives to foreclosure,” accessed Dec. 08, 2017