Foreclosure Guidelines to Handling Your Debt

Foreclosure Guidelines to Handling Your Debt

foreclosure guidelinesDue to the state of the current economy, a lot of homeowners are facing the possibility of foreclosure. When this happens, you have to quickly determine what’s gone wrong and come up with a reasonable solution to make things right again. Whether you have faced a demotion, layoff, or sudden illness, making the effort to explore every alternative can help. There are actually several options available to solve this financial hardship, and I’ll share a few of these foreclosure guidelines with you.

Refinance with an Institutional Lender

One option to avoid foreclosure is to bring your payments up to date with a loan from institutional lenders. You can do this by borrowing with your home’s equity, also known as refinancing. The equity of your home is determined by comparing the current market value of your home with the amount of money you still owe on your mortgage. Refinancing simply involves taking out another loan to pay off the previous mortgage.

Choosing to do this can actually make keeping your house more affordable. Refinancing can extend your payment period, which can significantly lower your monthly payment and interest rates. Yes, the fact that you are near foreclosure can make lenders a little concerned about opening a loan with you, so it’s important to act on these foreclosure guidelines quickly before back payments have made a major impact on your credit rating. If it’s too late, expect higher interests rates, but refinancing may still hold benefits for you.

Acquire a Loan from a Private Lender

You could also try obtaining a loan through a private lender. Private lenders are individuals or companies that are looking to make higher, faster returns on their funds than savings and stocks can provide. They are typically more interested in the equity of the home than anything, so it may be easier to obtain help from them. Even those considered at-risk due to defaults in their credit history may be able to find a solution here. I have a friend that runs a private lender database you might want to check out here.

However, you should remember that loans like this will always have much higher interest rates than what you would find from a bank. If you have bad credit, these lenders will be less willing to help you out if you ever miss a payment again. They made the deal with you based on the security of the investment in your properties value, so you would be at a high risk of losing your home again if payment obligations can’t be met. If you feel this may be a problem for you, then put more emphasis on the other foreclosure guidelines or alternatives available.

Settling Your Note

This might come as a surprise to some but you can actually settle your 2nd mortgage (if you have one) for less than what you owe. Similar to a short sale, however you get to stay in the home and it doesn’t affect your credit if you do it right. You also don’t need to be behind on payments. Really what they look for is a hardship of some kind. Really a great strategy for those looking to eliminate some debt. The only downside to this strategy is that you may have to come out of pocket to payoff the note.

For example if you owe $80,000 on your 2nd and they agree to accept $20,000 as a payoff, you’d have to come out of pocket $20,000. But there are ways to pay that off and get a more manageable monthly payment because you just eliminated $60,000 in debt.

Make More Money

I’m sure that exactly what you wanted to here for a foreclosure guideline. I’m sure you would love to make more money, if only you had the time and know what to do, right? Well watch this video of Cameron Dunlap and he’ll show you a few things you can do to make some extra money.

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