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How You Can Save Your Home

IF YOU'RE FACING THE POSSIBILITY OF FORECLOSURE, KNOW THAT THERE ARE SEVERAL WAYS TO STAY IN YOUR HOME & FIND A SOLUTION FOR YOU.

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Here are a few options we can explore together:​​

Loan Modification: A loan modification can help make payments more manageable by adjusting loan terms such as interest rates, payment schedules, or even principal amounts. Contact your lender proactively to see if you qualify for this option. Many lenders are willing to work with you before you fall further behind on payments.

Refinancing:

Refinancing can offer a fresh start, but it may be challenging with a low credit score or in a rising interest rate environment. Here are some specific refinancing options to consider:

  • FHA Streamline Refinance (for existing FHA loans): If you have an FHA loan with a good payment history, this program allows refinancing without a credit check or new appraisal.

  • VA IRRRL (for Veterans): Veterans with a VA loan can use this program to refinance with minimal requirements if they’re current on payments.

  • Non-Qualified Mortgage (Non-QM) Lenders: Non-QM lenders consider factors like income and assets rather than credit scores, though at higher interest rates.

  • Home Equity Loan or HELOC: With significant equity, these options may be available but often come with higher rates.

  • Credit Improvement: Working to improve your credit before refinancing can make a big difference. Consider catching up on payments, reducing debt, and checking for errors on your credit report.​

Repayment Plan: A repayment plan is a solid choice if you’re able to resume monthly payments but need time to catch up on missed ones. Through this arrangement, you can spread out past-due amounts over several months, added to your regular payments, making it easier to bring your loan current without major upfront costs. Lenders may be open to discussing a repayment plan to help you avoid foreclosure.

Loan Reinstatement: A repayment plan is a solid choice if you’re able to resume monthly payments but need time to catch up on missed ones.

Forbearance:

Forbearance is an arrangement where your lender agrees to temporarily reduce or suspend mortgage payments, providing short-term relief without immediately moving to foreclosure. Forbearance is ideal if you’re facing a temporary hardship (e.g., job loss, medical expenses) and expect to resume regular payments in the near future.

  • How it Works: During the forbearance period, your lender either reduces your monthly payment or suspends it entirely. Once the forbearance period ends, you’ll need to catch up on the missed payments, often through a repayment plan, loan modification, or by adding the missed payments to the end of the loan.

  • Considerations: Forbearance does not erase missed payments but defers them until you’re in a better position to resume. It’s a good option if your financial hardship is temporary, but you should discuss with your lender the terms for catching up on missed payments once forbearance ends.

Short Sale: In a short sale, the lender may agree to accept less than what’s owed if the home’s value is lower than the mortgage balance.

Deed in Lieu of Foreclosure: This allows you to voluntarily transfer ownership of your home to the lender, avoiding the negative effects of a foreclosure on your record. However you typically will lose all the equity you may have built up in your house.

Hardship Letter to Lender: Writing a hardship letter can explain your financial situation to your lender and request temporary relief or adjustments to your payment terms.

Bankruptcy (Chapter 13): Chapter 13 bankruptcy provides a structured way to stop foreclosure through a court-approved repayment plan, typically over 3 to 5 years.

  • By filing for Chapter 13, the foreclosure process is paused, and you’re allowed to catch up on arrears in manageable monthly installments. This approach is ideal if you have steady income and can commit to the repayment plan, but it’s essential to ensure the payment amount is sustainable over the long term. 

  • For example, 150k loan payment due over 5 years may not be manageable but it can give you enough time to sell your home.

Government Programs: There are several government programs designed to provide relief, including loan modifications, forbearance, or refinancing assistance to help you avoid foreclosure

Renting Out Your Home: Renting your home may provide the income needed to cover mortgage payments. 

Considerations: Renting out your home can take time and have initial upfront costs. 

  • You must ensure the property legally meets the safety standards (installing smoke detectors, carbon monoxide detectors, checking for mold, etc.), 

  • You may need to upgrade to landlord insurance, which is typically more expensive but essential for liability and property damage protection.

  • You may need to hire an attorney or use a property management service to draft a legally compliant lease agreement

  • It can take several weeks to find a qualified tenant, so consider how much time you have to dedicate to showing the property and vetting candidates.

Here are key steps to take:

  • Check Your Mortgage: Confirm with your lender that renting is allowed under your loan terms.

  • Meet Local Regulations: Obtain any necessary permits from your city.

  • Update Your Insurance: Inform your insurance provider and switch to landlord coverage.

  • Ensure Property Compliance: Make sure your property meets local rental standards.

  • Screen Tenants: Conduct background checks, credit reviews, and income verification.

  • Draft a Lease Agreement: Outline terms, rent amount, and responsibilities.

  • Market the Property: Use online platforms to reach potential tenants

Selling Your Home To Us! : If staying in the home isn’t an option, selling it before foreclosure can help you avoid the financial, legal, and emotional toll. Not only do we provide you with a full cash offer but also the complete care and support you need to transition.

Each of these options depends on your situation, how far behind you are, and what your lender is willing to offer. We’re here to walk you through the process, answer your questions, and help you make the best decision for your future. You don’t have to face this alone.

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