Negotiating With Lenders Can Keep Your Home Out of Foreclosure
By Francine L. HuffMortgage Credit Problems Columnist
Have you done everything you can to avoid foreclosure? Many homeowners with bad credit think getting a debt consolidation loan, refinancing, or selling is their only solution. But don't overlook the important step of trying to negotiate with your lender to avoid foreclosure.
Get Prepared
Your lender is going to want to know why you've fallen behind on your mortgage payments, so make sure you have all your facts before you call. If you lost your job or have high medical bills, let your lender know that. Gather together all your bills and other debts so you know exactly how much you owe each month. Your lender will also want to know about your monthly income.
Make That Call
Once you contact your lender you have several options depending upon whether you need a temporary solution or something more lasting. Depending upon your situation, you may want to negotiate for a temporary delay in payments, which may be enough if you anticipate starting a new job or receiving another increase in income soon.
If you know that your salary isn't going to change, or have lost part of your household income, try to negotiate for a mortgage loan restructuring. Some lenders may be willing to lower your monthly payments or even decrease the amount of interest owed on a mortgage loan for a few years. Another possibility is that your lender will allow you to stretch out the amount of the delinquent payments over the life of the loan. Even with poor credit you may be able to negotiate a refinance to get a longer term with lower payments.
Don't let having bad credit keep you from negotiating with your mortgage lender to save your home. The sooner you take steps to improve your situation, the better off you'll be.
Sources
Mortgage Loan Search Financial Network
About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.
About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.
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