Our homes are a safe place from the rest of the world. It’s the place where: we finally relax at the end of a long day at work, raise our kids into mature adults or finally settle down after retirement. Our homes are a special place in our hearts.
That’s what makes the foreclosure process more devastating. Many families or adults are forced out of their homes due to missed payments or stacking bills. However, there are ways to slow down or even stop the foreclosure process at times.
Inform yourself first
When you receive your first notice, it may terrify you at first. But take a step back and ask what does this means. There may even be valuable information in your notice that gives timelines, preventative actions and resources for additional questions.
Each state also has different starting points for the foreclosure process. In Ohio, the mortgage foreclosure begins when the lender files a lawsuit with the court – it’s a brief complaint stating your information, the type of loan you have and why they are seeking a foreclosure. If you educate yourself on the process beforehand, you can make the process work in your favor.
Work with your lender.
Despite popular opinions, lenders do not want to foreclose on homes; it only causes them to lose out on time and money during that process. It’s better if homeowners can contact their lenders immediately after notice and establish a new approach, like:
- Refinancing – use a new loan with different interest rates and terms. Ultimately helpful if you want to keep a good credit score and lower monthly payments.
- Repayments – make a plan with your lender to make repayments at a reasonable rate for your budget.
- Modification – some lenders may change the terms of an existing loan to make our mortgage more manageable.
All three options rely on your lender and the state of your finances today.
File for bankruptcy
If you do not have the funds for a new loan or repayment plan, you can file for bankruptcy and still keep your home. Bankruptcy allows homeowners to delay foreclosure and slowly eliminate debt over a specific period. It is excellent for those folks who need significant financial relief. You can either file for Chapter 7 or Chapter 13, depending on how much property you want to keep intact.
Make a short sale
Your last option is to sell your home as a short sale, where the lender agrees to settle for less than the home is worth. The bank would be in charge of accepting any offers once your house is on the market. It’s a hard option since you would be giving up your home, but you would be able to avoid foreclosure and hopefully help your finances.
You can try one or multiple of these options depending on your situation. It’s just crucial to evaluate what is worth fighting for when it comes to your life. If you want to retain your property, consider working with your lender or bankruptcy. If you are willing to let it go, then the short sale may be best.
Take time and make an informed decision before calling anyone.