The time to start considering a foreclosure loan is the first month you miss your loan payment. Just as you shouldn’t head into the wilderness without first consulting a map, you should also have some idea of what a foreclosure proceeding entails.
Foreclosure is a lengthy process and during the time up until your home is actually auctioned off, you can find cash and negotiate a resolution to forestall foreclosure proceedings. So let’s first see what the foreclosure process is and then we’ll consider foreclosure loan options that may be available to you.
Foreclosure begins, technically, on day 30 of your overdue payment. Foreclosure loans are not usually available at this early stage, but you could consider alternatives to get you out of your relatively small problem at this point. A phone call to your lender can often be all that’s required to set up a way to resolve the situation. They’ll usually be willing to work with you in modifying your loan or amortizing the payments. During the first two or three months, this is usually your best option for resolving the situation. Ignoring the situation is the worst thing you can do.
When a lender cannot get in touch with you or cannot come to a resolution of the problem, then they will begin the legal proceedings of a foreclosure. For you, this means if you want to resolve the situation at this point, it’s become much more expensive to do, because you’ll be responsible for the legal fees your lender is incurring. You can still contact the lender to stall proceedings and find out what, exactly, is needed to bring the account current.
Now that you know what you need to stop foreclosure, you can look into ways of raising the money needed to resolve the situation. This is when looking for foreclosure loans becomes a serious option. Most lenders will loan only 65-75% of the home’s fair market value, so you’ll need to have enough equity to cover the other 25-35% plus the legal and other fees involved. Make certain that the lender you’re working with is reputable and read the paperwork carefully.
Foreclosure loans are a viable way to get out from under a huge financial mess without losing your home, but paying your mortgage on time is the best way to keep it from happening in the first place.