Mortgage interest rates are rising. For homeowners with an adjustable rate mortgage (ARM), making the monthly mortgage payment is getting harder. If you’ve been late on your mortgage payments, you might have begun receiving foreclosure notices from the bank. Having your home foreclosed can be a scary situation. The good news is, there are ways to keep your home from being foreclosed.
The first thing you should do is contact your lender. Most people want to avoid talking to their lenders for fear of making the situation worse. Alerting your lender to your financial situation as soon as possible can only help. It’s best to contact your lender before you ever miss a payment. Even you’ve received foreclosure notices or have missed one or two payments, you can still hope for assistance from your lender.
Once you talk to your lender, request temporary forbearance or enrollment in a hardship program. Your mortgage lender doesn’t want to go through the foreclosure process any more than you do. That’s why lenders have such strict requirements for loan approval. Many lenders have some type of program that will suspend your payments for a period of time while you get back on your feet. You’ll never know if you don’t first ask.
Depending on your credit history and the balance of your loan, refinancing your mortgage may be an option. If you qualify for a loan with a lower interest rate or can spread the remaining balance over a longer period of time, you may be able to reduce your mortgage payment to one that’s more comfortable for you.
If you had financial trouble before but are now in a better situation, you may be able to come up with a repayment plan for getting caught up on your mortgage. You may have to make temporary changes in your lifestyle to come up with the extra money. Once you have a repayment plan, communicate it to your lender. Let them know you were previously having financial trouble but are now able to resume making timely payments.
Unfortunately, there are times when all the previous options are out of reach. You may be forced to sell the property rather than having it foreclosed. Even though this isn’t the most desirable solution, sometimes it’s more attractive than the alternative foreclosure.
Even if your mortgage payments have become out of reach, you don’t have to allow a foreclosure to happen. Being proactive and communicating with your lender are the best ways to avoid having your home foreclosed.