How Do I Save My Home From Going Into Foreclosure?

Today there are literally hundreds of thousands of people that may be facing foreclosure. Unfortunately experts predict that the housing market has yet to hit rock bottom, and we are still seeing record highs in unemployment rates. The good news is that if you are facing foreclosure, or have already begun the foreclosure process, there are a few options available to save your home. The bad news is that you will have to show that you are gainfully employed in order to do so.

If you are facing foreclosure because you lost your job and have yet to find employment you realistically will lose your home unless you can find a job in time. For those of you that maybe lost your job and had had to take a new job at a pay cut, or if you work off of commission and your pay has been decreased because of the economy, there may be some hope for you.

There are two options available for those that may be facing foreclosure but have gainful employment and wish to keep your home. You could either refinance your home (although this would most likely only be available to those who have not yet missed a mortgage payment and who have good credit) or you could apply for a loan modification through your mortgage lender. Both of these options will extend the life of your loan, reduce the interest rates, or both in order to achieve more affordable monthly payments.

If you have good credit and have not yet missed a mortgage payment then you should immediately apply to refinance your loan. Let's say that you have 15 years left on your mortgage and your monthly payments are $2,600. You can cut your monthly payments in half if you refinanced your loan to 30 years. This would make your mortgage payments around $1,300 which may be more affordable for you.

If you have already missed a mortgage payment you may be eligible for a loan modification. Some mortgage companies will require that you are up to four months delinquent on your mortgage payments before you are granted a loan modification. This again will vary depending on your state and your mortgage agreement. A loan modification will adversely affect your credit; however it will not do near as much damage as a foreclosure will.

If you are in this unfortunate situation the best thing you can do is talk to your mortgage company immediately. The sooner you start to explore your options, the more options you are going to have to work with.