Avoiding Foreclosure With Home Refinancing
In this article, we will discuss how to avoid foreclosure by refinancing your home as another way to stop foreclosure (we discussed in previous articles – Avoid Foreclosure with Loan Modification and Avoid Foreclosure Short Sale Option )
Most people think a good way to avoid foreclosure is to refinance the mortgage and start over. In fact, it is not that easy, since most people cannot refinance. Yes, stopping foreclosure with home refinancing is not easy. You will run into all kinds of mortgage brokers and lenders out there who will tell you what you want to hear and waste your time. Time is something you can’t afford to waste when you are trying to avoid foreclosure. You only have about 4-8 months after missing your first mortgage payment until you lose your house. The foreclosure process varies by state and lender.
Who can refinance to avoid foreclosure?
You need equity in your home. Depending on how far you are in the process, you need at least 10% to 25% equity in your property. The farther you are in the foreclosure process, the more equity you will need. If you are more than 2 payments behind and you don’t have at least 25% equity, it is almost impossible to refinance. Make sure when you are calculating the equity you factor in all the late fees and legal fees.
Speaking of how far along you are in the foreclosure process, that makes a huge difference when refinancing. Once you are more than 90 days late on your mortgage, everything changes. The rate will dramatically change if you can even refinance at all after that point. That is why it is so important to pick the right mortgage broker or lender because if they are not experienced in these types of loans, they can take too long and you will pass the point of no return.
Some private party lenders may be able to refinance you to avoid foreclosure. These are typically known as hard money lenders. They decide if they will lend you the money personally. There are no underwriting guidelines. It is a case by case basis. These can be very expensive. The rate and fees will probably be so high you won’t be able to afford it.
That brings up an important point. Even if you can refinance, what is your new payment going to be? If you are having trouble making the payment now, the payment is guaranteed to be more because you are trying to avoid foreclosure by refinancing. Any loan you get will be expensive.
If you do not have equity in your property do not even consider refinancing your home to avoid foreclosure. You will end up wasting valuable time and money to find out no one can help you. I hope this article has helped you to learn something about stopping foreclosure and realize that very few people can help stop foreclosure.
Please be aware of loan scams, learn more at http://www.preventloanscams.org/
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Avoiding foreclosure can be impossible for families in a bad financial situation.