Foreclosure, it is a word that strikes fear in the heart of every homeowner. We know all too well the threat of foreclosure and know we will stop at no cost to avoid it. However, studies are finding that while many people fear foreclosure, few very are actually educated as to all of their options.
Understanding Your Options
Many people assume that there are a few ways to handle a foreclosure (1) give into it and try and move on or (2) deal with the hassle of a short sale. A short sale can get a homeowner out from under a sinking mortgage, but why sell the house if one can save it and catch up on payments? Refinancing is another common solution often encouraged by lenders to help alleviate mortgage debt problems, but can cost the homeowner far more in additional expenses in the end. Although short sales and refinancing are options, they aren’t the only options and certainly not always the best ones.
A mortgage loan modification is a concept that many people have never even heard or know very little about. Perhaps one of the best starting points for underwater homeowners, a mortgage loan modification can provide relief from mortgage debt while avoiding foreclosure and keeping the house. By changing the terms and conditions of the existing loan, the homeowner can greatly reduce their monthly payment while they get caught up on missed payments. The lender is usually willing to work with a homeowner through mortgage modification rather than risk losing more of their money in a foreclosure. It is a win, win situation for both parties, but can only be achieved if initiated by the homeowner.