Facing foreclosure is a very stressful event, especially if it is combined with other financial changes like losing a job or if your family is depending on you. Many distressed home owners turn to refinancing a mortgage in order to avoid losing their home and keeping a shred of credit intact. Refinancing is usually the best long term solution to a foreclosure threat and financial crisis, but sometimes a homeowner needs more time for whatever reason before being able to secure the best refinance terms. Find out more about how to delay a foreclosure in order to buy some time.
The best strategy is taken long before foreclosure is a serious threat. At the first sign of trouble of meeting payments or if you've had a change in your financial life like losing your job, contact your mortgage lender. A formal letter of hardship should be filed explaining what changes have taken place. Many financial institutions would rather work with you up front to set up changes to the terms of your loan before they have to threaten foreclosure. Even if foreclosure is looming large, filing a hardship letter may help delay the foreclosure and end up saving your home.
If your current home mortgage lender is not willing to work with you to make it easier for you to make payments or even to delay all payments for a short period of time, then you should begin the process of looking for a new lender to refinance your home loan. Take your time to shop around since you want to get the most favorable rates and terms available.
If you are already in the foreclosure process, your credit score may be lower than desired which will impact the rate you can secure for your new loan. Consider all of your loan options and make sure you can afford the new payments. Getting another mortgage lender with a loan you still can not afford may delay foreclosure, but this will negatively effect your credit score and limit your ability to secure another home loan when your financial crisis is over.