Nobody plans to go into foreclosure on their home, yet it happens a lot. Unless you’re actively participating in mortgage fraud (and we’re just going to assume you’re not), you simply can’t predict the circumstances that may cause you to fall behind on your mortgage payments.
Things like job loss, divorce, a death in the family, or excessive debt can all contribute to a foreclosure situation.
Fortunately, there are ways to prevent foreclosure and keep your house if you do find yourself in a dire situation:
- Ask your lender about forbearance. Some lenders will agree to wait before moving to legal action against you. Talk to them.
- Look into debt forgiveness. It’s a long shot, but some lenders will agree to waive a missing payment and let you pick up with your current bill.
- Change your loan terms. Ask your lender for a note modification, which is a way to extend your amortization period. Or, if you have an adjustable rate mortgage, ask the lender to freeze your interest rate before it goes up.
- Add back payments. If you have a decent amount of equity, you might be able to get your lender to increase your overall loan balance in a way that includes back payments. This will re-amortize your loan.
- Get a separate loan. You can also look into applying for another loan. If you meet the provisions, you might qualify for certain government loans. This second loan would then pay back your missed payments (called a partial claim).
