Owning a home is a major accomplishment. Thus, when one is facing the potential loss of their home due to foreclosure, it can be a very overwhelming and pressing time for an individual or family. When foreclosure is a possible reality, it is important that one fully understands their situation and how best to move forward with it, especially if they seek to stop or avoid the process altogether.
Avoiding a foreclosure
No one wants to lose their home; therefore, one is likely to take steps to avoid this, no matter the financial hardship he or she faces. One way to avoid a potential foreclosure is to refinance a mortgage. This could make mortgage payments more affordable, helping one to avoid default. Additionally, if it is still unmanageable after a refinance, it is possible to extend the terms of the financed loan, helping the homeowner to make payments more manageable.
Refinancing a mortgage
Because rates are at an all-time low, it is very popular to refinance a mortgage However, if one foresees financial troubles on the horizon, it is important to take these steps immediately. Additionally, the sooner one takes this step the better, as it can help one obtain a better deal because they likely have not encountered other financial hardships at this point in time.
There are two factors to consider when refinancing a mortgage. The first is the homeownership timeline, which is the length of time one expects to live in the home. The other is closing costs and fees, which are based on the after-tax monthly savings, the amount of time one intends to be in the home and the costs to obtain the new mortgage.
Filing for bankruptcy
While refinancing a mortgage could help one avoid disastrous financial issues; it may not prevent them. One may still default on a home loan, resulting in the foreclosure processes initiating. If this occurs, it is possible to put a halt on it through a bankruptcy filing. If one is considering bankruptcy, it is imperative to explore this process and what options one might have.
Facing a foreclosure of a home is a difficult life event to go through; however, it is an event one can work through successfully. Addressing debt issues can be challenging, especially when one is behind in paying several bills and loan obligations. Therefore, it is imperative to determine what steps are best for you when it comes to dealing with a foreclosure and managing one’s debts and finances.