On behalf of Lang Law Office posted in Real Estate Transactions on Thursday, August 24, 2017.
If you’re facing foreclosure, then you may find it refreshing to know that bankruptcy is not the only option to pursue to save your home. Instead, there are a variety of alternatives that may be available to you to help bring your mortgage payments current or stay in your home.
Reinstatement is a process by which you repay any past due mortgage payments as well as outstanding penalties. Those most capable of catching up payments in arrears may be those who land a new job or inherit some money. Two great things about re-instatements is that they don’t have to be pre-approved by the lender and they can occur up until the day right before the home’s foreclosure sale is slated to occur.
If you’re unable to bring your mortgage payments current, then you may be able to have the terms of your loan modified. As part of the loan modification process, your lender may take delinquencies and tack them on to the back of your outstanding loan amount. Alternatively, they may lengthen your loan payback period or adjust your interest rate, each with the goal of reducing your monthly loan payment obligation.
Another alternative to foreclosure is loan forbearance. Under this type of payment plan, you may be allowed to pay anywhere from nothing up to a small percentage of your regular monthly mortgage obligation for a certain period of time.
This option may be particularly appealing for you if you’ve recently become unemployed, had your work hours reduced or are experiencing a temporary decline in health. At the end of the forbearance period, you’ll need to pay toward both your regular monthly mortgage and the past-due balance.
Renting your home is another option you may choose to pursue. One of the main downsides of doing this is that you may have to find another place to reside. Other negatives center around the idea of being a landlord and still being on the hook for paying property taxes, insurance and other fees. However, if you’re able to stay on top of your mortgage payments, then you may be able to ultimately move back into your home.
If you’re falling behind on mortgage payments for your home and you’re looking for help in finding an alternative to foreclosure, then a Minneapolis real estate attorney can provide you with the help you need.
Source: Your Home 123, “8 Alternatives to foreclosure,” accessed Aug. 24, 2017