If you are about to lose your home, you might be trying to think of ways to get out of foreclosure. Fortunately, there are some things you can do to avoid losing your home. What you do depends greatly on where you are at in the foreclosure process. The steps to take if foreclosure is impending versus a foreclosure already in process tend to vary.
Talk to Your Lender
Above all, the most effective way to get out of foreclosure is to talk to your mortgage company. This is something you might be avoiding out of either embarrassment -- or you may feel sure the mortage company won't work with you. First of all, don't be embarrassed. A lot of people are in danger of losing their homes, and it's nothing your mortgage company isn't used to hearing about. Second of all, you might be surprised by just how willing your mortgage company will be to work something out with you. They probably don't want to take possession of your home anymore than you want to lose it. Taking your home away from you costs your mortgage company a lot of money, and also lots of hassle. Most of the time, they'd prefer to work something out with you.
Get Out of Foreclosure with a Loan Modification
If the foreclosure process has yet to begin, you might be able to do a loan modification. With a loan modification, you usually make some trial payments for a few months to prove you can afford your home. After the payments are complete, you might get a lower payment. Some mortgage companies will also reduce your interest rate for you.
See If You Can Refinance Your Mortgage
If your payment is more than you can afford, ask your mortgage company about refinancing your loan. They may or may not be willing to do this, but it doesn't hurt to ask. If they don't want to, see if they will give you more time to catch your payments up.
A short sale is an occasionally an option if you are already in the foreclosure process and you owe more on your home than it appraises for. With a short sale, the mortgage company agrees to take whatever amount you can sell your home for, even if it's less than what you owe, and forgive the rest of the debt. Keep in mind that whether or not your mortgage company agrees to this will depend on how much they stand to lose or gain from such a sale. A short sale is a good way to get out of foreclosure, but your credit will not remain unscathed from it.
Deed in Lieu of Foreclosure
Another way to get out of foreclosure is by doing a deed in lieu of foreclosure. Basically, you are just giving your home back to the mortgage company when you do this, and they forgive your debt. This doesn't always work out because your mortgage company might not want to do it. It also hurts your credit to go this route.
Ultimately, the best way to get out of foreclosure is by talking to your mortgage company. They can better explain your options to you. You might think losing your home is inevitable, but if you truly want to keep it there are usually ways to do it. Avoid phone calls and correspondence from your mortgage company is usually the worst thing you can do, and will only ensure that you will not be able to get out of foreclosure.