Perhaps you’ve missed a couple of monthly payments on your mortgage. You may have even receive a notice of default from the lender. You have having difficulties affording your house, but the thought of a foreclosure is stressful. What can you do?
You’re not the only one in this situation, which is why there are foreclosure alternatives for homeowners experiencing difficulties. Let’s take a closer look at five of them.
1. Negotiating a Repayment Plan
With a repayment plan, you and the mortgage lender come to an agreement in which you start making regular payments plus part of the arrearage. This catch-up arrangement works best if you are now in a position to afford the mortgage payments plus a little extra. The length of a repayment plan will depend on how much is outstanding and the size of the repayment you can afford, although most plans last three to six months.
2. Refinance Your Mortgage
Another option is to use the equity in your home to refinance your mortgage and cover the outstanding payments.
This strategy also affords you a better opportunity to negotiate for better terms, such as a lower interest rate or more affordable payments. If your current lender does not agree to a refinancing, you can approach a new one.
3. Seek a Mortgage Modification
With a mortgage modification, you can extend the term of the loan, convert from a variable interest rate to a fixed one, or reduce the interest rate, with the outcome being a payment schedule you can afford. There are different mortgage modification programs available, from the Fannie Mae and Freddie Mac Flex Modification program to proprietary, lender-specific arrangements.
4. Special Forbearance Plan
If you qualify for special forbearance, your monthly mortgage payments will be reduced or suspended temporarily, allowing you to regain your financial footing, and the lender will agree to not initiate a foreclosure during the period of forbearance. Afterwards, the payments will resume at an agreed-upon date, the amounts increased so you can cover the missed payments. If your financial difficulties have not been resolved by the end of the forbearance period, the lender may extend it at their discretion.
5. Deed in Lieu of Foreclosure Agreement
If none of the previous alternatives are feasible for you and you’ve been unable to sell the property at fair market value within 90 days, a deed in lieu of foreclosure allows you to terminate your home loan by voluntarily turning over the property’s deed to the lender. Your mortgage provider will subsequently release you from further liability, although you may have to pay a portion of the loan balance if the home is worth a lot less than the outstanding mortgage.
If you are encountering mortgage difficulties in Oklahoma, contact Attorney B. David Sisson for a no-obligation consultation. Mr. Sisson is committed to helping homeowners find workable solutions to difficult financial challenges and will guide you toward the relief resource that’s most compatible with your situation.