“Foreclosure” doesn’t have to mean “foregone conclusion” if you’ve missed a mortgage payment or two. While you should always first call your lender in Austin as soon as you realize you won’t be able to make a mortgage payment, there are still a number of things you can do to prevent your home from going into foreclosure if you have been missing payments and are starting to get notices about actions being taken towards foreclosure by your Texas lender.

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Here are 7 ways to prevent foreclosure on your home:

  • Mortgage Loan Modification Your lender may be willing to work with you to modify the terms of your loan to make it easier for you to make the monthly payment. Having a lower monthly payment could, however, extend the number of years that you must continue paying the mortgage. Also, make sure the new payment amount is actually affordable for you. You don’t want to end up in mortgage delinquency again. Generally speaking, lenders aren’t as understanding the next time around…especially if the next time is coming as a result of a modification they approved for you with your assurances that you would be able to make the payments. In other words, stay realistic about what you can afford, and don’t sign yourself into any kind of loan modification that isn’t realistic for you.
  • Forbearance With a forbearance agreement, you would be allowed to skip several months of payments, or temporarily make a lower payment. A forbearance is usually only granted in the case of a temporary hardship, like an illness, natural disaster or job loss. A forbearance can, however, make a massive different if you are only temporarily in need of some extra help from your lender, or simply some extra understanding. It’s always a good idea to communicate with your lender no matter what is going on if you know you may be late or missing mortgage payments. Upfront communication ensures the best possible chance your lender will want to work with you.
  • Deed in Lieu of Foreclosure Basically, this means that you sign over your house to the lender and walk away. This allows you to escape foreclosure, but make sure that you will not be held personally liable for the remainder of the mortgage. You should ask your lender, too, if they have a “cash-for-keys” program, which helps you with your relocation costs. The deed in lieu of foreclosure is supposed to ensure that you aren’t personally liable, but it is up to you to make sure the agreement you sign for this does in fact protect you from the lender coming after you for any further portion of the mortgage. It’s always a good idea to have an attorney or a HUD-approved financial counselor check over these agreements before you sign them.
  • Contact a HUD-Approved Counselor Before signing any agreements, it’s wise to call the Department of Housing and Urban Development (HUD) and speak to a counselor there. Free counseling is available for homeowners who are struggling. They can also help with managing credit card debt, assist with budgeting, and working with other financial challenges. Your regional HUD office can give you more information and get you going with a counselor.
  • Repayment Plan Your lender may be able to offer you a structured repayment schedule that enables you to get caught up over a specified period of time. While it doesn’t reduce the total amount that you owe, it does give you the opportunity to make more manageable payments. As with a loan modification, only take this option if you are certain you can make the payments. It’s really pretty useless if you can’t, so if you think there is even a chance you won’t be able to make all of them, it’s worth looking at other options instead.  
  • Short Sale With this option, you sell your house for less than you owe on your mortgage. After this sale, your lender may or may not be legally able to enforce your obligation for the difference, depending on the terms of your mortgage and the laws in your location. It’s wise to get your lender’s agreement not to try to collect the remainder of the mortgage from you in writing before you agree to the sale. A short sale always seems like the best possible option if you are considerably behind and know you are not going to be able to get caught up with your mortgage payments. In many places, though, it doesn’t actually let you off the hook in terms of your liability, and you can end up without your home but still responsible for the difference between the short sale and the total you owe on your mortgage. Make sure you investigate this option fully with the assistance of an attorney or a HUD-approved financial counselor to make sure it really is the best deal for you.
  • Sell Your House For Cash If you can no longer afford your mortgage, the easiest option may be to just move on completely and sell your home for cash. Love Texas Houses is in a position to assist you with this, and may even have some other ideas of additional options you can attempt before you go this route. 

If you’re looking to sell your house for cash or are in a tight spot with your mortgage lender and don’t quite know where to turn, contact us at Love Texas Houses. We can assist you, whether that means giving you a fair cash offer for your home, or exploring options that would otherwise help you with your lender. We have been in your shoes and we know exactly what it feels like to have that kind of stress and anxiety about being able to make your payments. We look forward to working with you.