What Are the Alternatives to Foreclosure

What Are the Alternatives to Foreclosure

If you are in the same situation as many other people today are, you may be looking for alternatives to foreclosure. To keep the foreclosure process from consuming your most valuable asset you will want to make your plan of attack and execute it early on. Strategic planning is your wisest course of action. You must know exactly what your options are and how to arrive at any given exit strategy at any given time in order to ensure the most successful course of action in avoiding foreclosure.

In any foreclosure situation time is never on your side. The ticking clock looms everywhere and arming yourself with knowledge will be your arsenal to fight this enemy. Whether your state offers a long process or shore process, you must take action quickly and efficiently in order to protect yourself and your assets.

There are several things you could do as alternatives to foreclosure. You can choose to leisurely sell your home, enter into a forbearance agreement with your lender, or simply ignore the problem and hope it goes away. The last option, while a joke, tends to be one most people choose to take. However, you're smarter than that or you would not be reading this article. Depending on how far into foreclosure process you are will dictate what your options are.

Remember the bank doesn't want your property. The bank is not in the business of buying and selling homes. The bank is not a real estate investment company. If there is equity in your property, you have a reliable source of income, and your credit rating isn't too damaged consider refinancing your home. You may have to pay a higher interest rate because after all you have missed a couple of mortgage payments, but a higher interest rate is better than losing your home.

If you are early on in the foreclosure process this is a good time to consider a forbearance agreement with your lender. The forbearance agreement is a contract between you and your lender to effectively refinance any missed payments thus far and to begin making payments again. In the event of a job loss and you can no longer make your payments a forbearance agreement will not be a solution. For your lender to consider a forbearance agreement there will be qualifications that must be met the first of which will be having it probable income.

If you have a verifiable income and your lender agrees to a forbearance agreement but you are somewhat lacking enough income to cover your payment consider taking a second job. Sometimes a part time night job is all you need to gain the extra income to cover your payment. Oftentimes if you have a verifiable income the lender will consider refinancing your mortgage to meet the monthly payment you can afford.

Not taking action is the most costly course of action you can take during the foreclosure process. You'll want of a solid plan and be ready to execute the plan to protect your home, your most valuable asset.