Foreclosure is a terrible situation to have to face. Fortunately, though, there are several solutions that you can try. You certainly don’t have to sit back and lose your home. Here are five remedies that can keep you in your home and give you time to get yourself together.

Forbearance

A forbearance can give you some time to get yourself together if you’re having financial hardships, or you’re waiting for some money to come in. According to Investopedia, with a forbearance agreement “the lender agrees to reduce or even suspend mortgage payments for a certain period of time.” The grace period will last for a predetermined amount of time, and then you will have to resume payments when it’s over.

Deferment

A deferment is similar to forbearance in that the lender will allow you some time to avoid paying the mortgage payment. Interest will still accrue, but you may be able to put the unpaid interest on the back of your mortgage. The deferment will give you ample time to straighten out any financial difficulties that you might be having.

Loan Modification

A loan modification is something else that you might consider requesting to avoid foreclosure. It’s like a reworking of your original mortgage agreement. As Consumer Finance explains, “Modifications may involve extending the number of years you have to repay the loan, reducing your interest rate, and/or forbearing or reducing your principal balance.” The bank may be willing to do it if you have some circumstances that caused your financial status to change. For example, you may qualify if a family member moved into your home, and you had to take responsibility for that person. The loss of a job, an unexpected disability or a divorce where you lose one of the mortgage payers will be situations that might qualify you for a loan modification. The loan modification process can be lengthy if you don’t have the assistance of an attorney.

Reverse Mortgage

A reverse mortgage might be able to help you if you are over 62 years of age, and you have a good amount of equity built up in the house. If your situation is right, you can take out a reverse mortgage and use the funds that you get from the payments to pay off your existing mortgage debt. Yes, it can work, but it should be a next-to-last resort.

Bankruptcy

Bankruptcy is something that you might want to do if all of the other methods don’t work. Using bankruptcy as a last resort is okay. According to CrediReady “filing for bankruptcy won’t magically erase all your debt, it can help you get a fresh start and re-organize your finances.” However, the process will affect you for many years if you get approved for it. In bankruptcy, you are declaring that you are unable to pay any of your debt. Such a statement and such a process will affect your credit score, but it’s still better than a foreclosure will be on you.

Those are just a small number of the ways that you can try to avoid foreclosure. You should always seek the counsel of a trusted attorney who may have a solution that you didn’t even consider.

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