Stop Foreclosure: What Mortgage Options Are Available?
- Forbearance: Lenders may let you make a partial payment, or skip payments, if you have a reasonable plan to catch up. Tell your lender if you expect a tax refund, a bonus, or a new job.
- Reinstatement: Reinstatement refers to making a payment that covers all your late payments, usually at the end of the forbearance period.
- Repayment Plan: If you can’t afford reinstatement, but can start making payments to catch up, the lender may let you pay an additional amount each month until you are caught up.
- Loan Modification: Your lender may agree to amend your mortgage to help you avoid foreclosure. The options include:
- Adding all the missed payments to the loan amount and increasing the monthly payment to cover the larger loan.
- Giving you more years to pay off the loan, lowering the interest rate, and/or forgiving part of the loan, to lower your monthly payment.
- Switching from an adjustable-rate mortgage to a fixed rate mortgage, so you aren’t exposed to increases in your monthly payment.
- Requiring amounts for taxes and insurance to be included with your monthly mortgage payment so you avoid big bills in addition to your mortgage.
- Sign Over the Property to the Lender in Exchange for Debt Forgiveness: This can hurt your credit, but it is better than having a foreclosure in your credit history.
Source: The National Association of REALTORS®.