If you have a mortgage but are struggling to keep up with monthly payments, you may be in danger of foreclosure. After working so hard to be a homeowner, it may be devastating to think that you may lose it.
Fortunately, there are options that may make it possible for you to avoid foreclosure and keep your home. If you are behind in payments or suspect that you will be soon, the U.S. Department of Housing and Urban Development states that you should contact your mortgage lender right away. Generally, they try to work with you to come up with a modified plan so you can continue paying the loan.
According to Making Home Affordable, the options potentially available through your lender often depend on if your financial situation is temporary or longer-lasting. For temporary situations, forbearance may be an option. This allows you to skip, or pay a reduced amount of, mortgage payments for a specified period of time.
Another option is to pay a lump sum to catch up on missed payments and fees. This reinstates your mortgage and brings you up to date.
If your financial situation has changed more permanently, the lender may be willing to modify the terms of the loan. This may change the length of the loan, the interest rate or the loan balance.
If you know you will be unable to keep up with payments, even with a modification, a short sale may satisfy the lender. This means selling the house for less than the remaining loan balance and using the money to pay back a portion of the loan.
If you want to keep your home and feel like you will be able to pay back the mortgage, bankruptcy may be an option. Many people think that if they file for bankruptcy, they will automatically lose their homes. However, Florida has specific bankruptcy exemptions that may help save your house, and it is worth exploring that possibility.