Recent studies show that Dallas has one of the lowest foreclosure rates in the nation, statistically only experiencing a third of the foreclosures that cities like Atlanta or Phoenix witness. Still, many families struggle with their mortgage, and foreclosure looms over them like their own fiscal cliff. Fortunately, refinancing options provide homeowners the opportunity to avoid foreclosure. If you cannot make your mortgage payments on time, consider refinancing the loan to fit your current budget.
Refinance Your Loan
Refinancing your loan is a perfect solution for those who have experienced a temporary drop in income or unexpected debt. Maintain clear communication with your mortgage lender to make the refinancing process easier. The sooner refinancing is completed, the sooner you can rest assured that foreclosure will be avoided.
- Begin once problems begin. Unless financial hardship completely strikes out of nowhere, you’ll have an idea that budgeting is about to become difficult. If you’re delinquent on your mortgage, the first 30 days after the missed payment is the best time to contact your lender. The chances of approval drop significantly 60 days past due.
- Consider deferred payments. If your financial hardship is temporary, your lender might offer a deferred payment plan that will allow you a 90-day grace period to regain your financial footing.
- Consider the HOPE for Homeowners (H4H) program by the Federal Housing Administration. This program helps homeowners avoid foreclosure by refinancing homes from stage one. Your home will be appraised and the H4H program could potentially fund 90 percent of the value of your home. Still, after refinancing you will still have to pay the outstanding mortgage balance with a 1.5 percent interest rate.
If refinancing isn’t an option at this point, contemplate meeting with a foreclosure attorney who can help protect your rights and finances.