Some people are worried about being able to keep up with their credit card payments so that they can maintain a good credit score. Others are worried about their credit on a grander scale. Foreclosure rates have reached highs that many of us have never seen before. Many people are panicked, especially those who are facing the possibility of being foreclosed on. I wanted to offer some suggestions to those who may need to look at their options. The sooner you act, the better the chances of saving your home. The most important thing to do is contact your mortgage company. You may not want to deal with the problem, but hiding from your lender will not make it easier. If you do this when you are only one or two payments behind, the lender may not start foreclosure proceedings. Explain to the lender the circumstances that led to your delinquency. Ask them about possible payment arrangements that may help you catch back up. Before they agree to help, you must review with them your current income and expense situation. Be sure to have that ready before calling. While each lending institution is different, here are some options that may be available: You may be able to spread the past-due balance out over several months. Each month, you pay more than the original amount. The extra money is credited toward the balance due until the delinquent amount is fully paid. The lender may postpone or reduce your payments if you are expecting a large lump sum in the near future. This may be a possibility if you are expecting a bonus or a tax refund. The lump sum would be used to get the past-due balance paid off, and the loan will be considered reinstated. The terms of your loan could be adjusted. The lender may allow you to add the missed payments back into the loan balance. They would then recalculate the monthly payment. Another option is extending the payoff date to give you a few extra months on the back end. This option enables you to keep your payment to remain the same. If you know that you can’t realistically keep the home, you still have time to act before the foreclosure is started. If you use one of the following options, you may lose your current home, but your credit will be in a much better position to enable you to buy again in the future when things are better for you financially.
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