The last thing anyone wants to loose is your house. Unfortunately even though we know this fact, sometimes we tend to take our mortgage payments for granted and end up loosing our homes. When a borrower fails to pay his or her mortgage for a number of payments (usually 5 or 6) the lender will issue a foreclosure by selling the house or repossessing it.
More often than not lenders often lead their borrowers to believe that they don’t have other options available. There are other alternatives that homeowners can use to keep their house off the auction block.
These are some of the options that homeowners can use.
You can get a short refinance for the foreclosure of your property. If you don’t want a new loan to cover an existing one, you can ask the help of a friend. A borrower’s friend or relative can buy or pay off the mortgage.
Negotiate a payment plan
You (the homeowner) agree to pay a portion of the amount and agree to pay the rest in the following months. The homeowner shows proof of their income and pays a down payment. This is a much easier way and most lenders agree to this plan.
Change of plans
In some cases a temporary change in the terms of the loan can be given when properly negotiated. These changes include but are not limited to, amortization extension and reduction of interest rate.
Third party sale
The property on foreclosure is sold to a third party. The proceeds will go to the mortgage lender as a settlement for the debt.
Friendly third party sale
The third party who buys the property sells it on foreclosure to clean the deed of other holders. Then, in turn the property is sold back to the borrower.
These are just some of the options that borrowers can utilize in attempting to retain their properties. Remember these alternatives are outside the original terms of the agreement. Homeowners may have to negotiate their way with lenders and banks. If borrowers don’t want to end up doing any of these alternatives it’s best to avoid missing your payments. Preventing home foreclosure is still better than looking for a cure.