No one in Florida can tell what the future will bring, particularly when it comes to money. Homeowners who have held a steady job for years might one day find themselves the victim of a company-wide layoff. Alternatively, a person could be struck with a serious illness, racking up significant medical bills. Or, a person's automobile may break down, necessitating an expensive repair. Really, there are a myriad of reasons why a homeowner may find they are unable to afford their mortgage.
Falling behind on your mortgage payments is incredibly stressful. People may fear that they will inevitably lose their home to foreclosure. However, there may be alternatives to foreclosure that allow them to keep their homes.
Some homeowners may seek a loan modification. This may be an option if a homeowner can currently make their mortgage payments, but cannot pay back their arrears. For example, the length of the mortgage could be extended, with the missed payments being tacked on the end, so the borrower has more time to pay it back. Another example of a loan modification is lowering the interest rate on the mortgage. Keep in mind, though, that not everyone will qualify for a loan modification, particularly if they have a significant amount of additional debt.
Another option might be to refinance your mortgage. If a homeowner's equity is substantial enough and the homeowner still has good credit, then it might be possible to lower mortgage payments by refinancing the loan. That being said, if a homeowner bought their property with a small down payment or no down payment at all, or if the homeowner's property has decreased in value, refinancing may not be an option.
A forbearance is another alternative to foreclosure that may be sought. Through a forbearance, the borrower agrees to pay only part of what they would normally be obligated to pay for a certain amount of time. It's a temporary measure that gives homeowners the time needed to afford their regular mortgage payments once the forbearance is up. Once the forbearance is up, the homeowner will make their normal mortgage payments, along with an extra amount meant to cover any payments past due.
These are only a few alternatives to foreclosure. Homeowners who find they cannot keep up with their mortgage payments should take action to pursue an alternative to foreclosure that may allow them to keep their home.
Source: yourhome123.com, "8 Alternatives To Foreclosure," Accessed Aug. 26, 2017