How To Avoid Foreclosure With A Home Refinance
No one really wants to deal with a foreclosure, even though it can seem like sweet relief if you have been dealing with missed payments and financial problems for a while. A foreclosure will relieve the burden of paying a mortgage you may not be able to currently afford, but it will ruin your credit and make it difficult for you to buy another home for the next seven to ten years. It can also make it difficult for you to rent another home. Your mortgage lender doesn't want to deal with a foreclosure, either. The paperwork, legal processes and additional manpower needed to deal with a foreclosure are a hassle for your lender, also. If you find yourself having difficulty making your mortgage payments, consider refinancing to save your home and your credit.
Talk to Your Lender
The most important thing to do if you are having financial difficulty is to talk to your lender. Don't hide or avoid the problem, as this causes things to snowball. Be proactive and talk to your lender right away once you start having financial difficulties. Your lender may be willing to reduce your payments or waive a couple of payments while you get things together. This will also reduce your stress by stopping collection calls and nasty-grams in your mailbox or email inbox.
Begin the Refinance Process
You should also be proactive by starting the refinance process early. If your current mortgage lender is unable or unwilling to work with you on this, don't despair. You can easily find a lender who will be able to help you save your home. Again, be proactive and start contacting lenders right away if you realize there is a problem or a financial hardship coming up. Few lenders will be willing to work with you to refinance if your payments are far in arrears.
Be Prepared for Higher Costs
If you refinance your loan, whether with the same lender or a different lender, be prepared for increased costs over the life of the loan. These costs may not present themselves up front, and that's okay (you can always refinance again later if your financial situation improves). Some of these increased costs are closing costs on the refinanced loan, a higher interest rate or additional payments to get caught up on the loan at the time of refinancing. For many homeowners, paying a slightly higher interest rate on a new mortgage is well worth being able to keep the family in the home. Contact a company like Best Rates Mortgage, LLC mortgage refinancing for more information.