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Are You in Foreclosure and Need to Refinance ?  There is Hope.

If you have found your self in foreclosure and need to refinance, the first thing to do is contact your current lender first. It is vitaly important that you take swift action to do whatever it takes to save from losing your home. If you act soon enough  there can be a very good chance that you will be able to save your home from repossession. Of course you must be realistic in properly assessing your situation. If your monthly payments have soared well beyond your reach, then it may be best to consider selling your home as fast as possible even if it means letting it go under value as opposed to losing it all together.

These are tough decisions to make, but in our current  economic times, if we do nothing, sometimes external circumstances will dictate our situations for us, so we may find ourselves forced to choose between several unappealing options.  However if you are suffering from a temporary financial set back, then there are options available that can help you prevent a foreclosure.

A  foreclosure will occur when you have missed some mortgage payments on your house and the banks start to initiate the process of taking over your property. However when this happens the whole procedure of a foreclosure can take up to a year before you actually have to evacuate your home.

The banks are never in an eager position to foreclose your home. They are not in the real estate business so repossessing a home is a liability in their books. They have to assume responsibility of the property until they can sell it.  The last thing the banks want to do, given the current housing market, is to hold on to a property that  can potentially lose its value while under their care.

The banks will do whatever they can to keep you in your home and get you to continue making those mortgage payments. Given the widespread situation with people facing foreclosures all across the nation, they are especially prepared to accommodate you as much as they can. Not to mention the government has stepped in and is offering insentives to lenders who a re willing to re negotiate new mortgage rates to homeowners.

Keep in mind that the bank does not want to go through this process. Every home on their books is a liability, so they want you to stay in the house and make payments, and they will work with you to do this. Especially now during this time because there are so many people facing foreclosure.

The main purpose of refinancing your home is to lower the monthly mortgage payments to a more manageable level. This is especially true for those who got swept up with ballooning adjustable mortgage rates in the past year that helped spurr the housing crash as we have it today. The good news  is that even if you have defaulted on a few payments, if you  have at least 30%  equity in your home, you stand a very good chance of refinancing and avoiding the foreclosure process.

However if your are in foreclosure and need to refinance, there may be other options available to you. You may be eligible for a foreclosure loan. This is essentially a short term second mortgage that could at least help inject enough cash into your finances to help you catch up on your payments. These loans usually consist of  2 to 5 year terms and will carry quite high interest rates, however it is certainly a much better option than to losing your home.

The most important thing is to act quickly, if you have missed your first mortgage payment and you doubt that you will be able to keep up with ballooning rates, then that would be the time to start considering your options. Most lenders will not offer any type of refinancing if you are more than 90 days behind on your mortgage.

If for whatever reason you find yourself more than 90 days late on your payments there are still options, however the more time passes the more precarious your situation will become. You may be still able to get a loan modification if your account has fallen into serious delinquency, and there exists private lenders that specialize in the area of  financially troubled homeowners who can no longer secure a traditional loan.

The Obama administration’s HASP ( Homeowner Affordability and Stability Plan)   may be something worth looking into.

For more information on the HASP go to  www.financialstability.gov