Tips on Avoiding Foreclosure
6 Tips on Avoiding Foreclosure
As a result of the sub-prime mortgage crisis, millions of homeowners have had to foreclose on their homes. With the current global economic crisis, nothing can be worse than not being able to pay one's mortgage. If you are having trouble paying your mortgage, here are some suggestions that may help you in preventing foreclosure.
- The Federal Housing Administration implemented the “Hope for Homeowners Program," which will continue through September 30, 2011. This program offers hope to the millions of homeowners who currently are at risk of losing their homes.
- The Federal Housing Administration also has a program called FHA Secure. In order to participate in this program, you must meet the following criteria:
A Repayment Plan. Depending upon your lender, you may be able to negotiate a payment plan so that you can double up payments based on a fixed timetable in order to catch up to the current amount due.
Forbearance is an agreement by which you can hold off payment of your mortgage for a short time. Again, depending upon the lender, certain conditions may apply. This is very similar to the forbearance policy applied to student loans.
Reinstatement is designed to help you catch up by making a one-time payment by a specific date.
Lower Interest Rate. Keep in mind that the last thing banks want to do is to foreclose on your home. Talk to your lender regarding lowering the interest rate on your mortgage.
- All past mortgage payments should have been paid by the due date.
- There must be at least 3% equity in your home.
- You must be employed for a specific period of time.
- All mortgage payments must be paid on time.