What is the quickest method to stop foreclosure? Pay off the loan of course, but if you were readily able to do that you wouldn't be in foreclosure in the first place. Don't despair. There are still methods that can be used to stop foreclosure fast. Read on to learn about common ways to stop foreclosure fast.
Refinance And Payoff the Loan
If your adjustable rate loan is rising or if you are facing foreclosure but have equity in your home, you may wish to consider a refinance loan. Refinancing is a common method used to stop foreclosure. Refinancing is finding a new lender to lend you the balance you owe so that you can payoff the original mortgage and avoid foreclosure. When you go to look for a lender to refinance you they will be looking at your credit rating, income and the amount of equity you have in your home. If you don't have enough equity or a stable income, you may find it hard to find a lender to take the risk.
Filing For Bankruptcy
Both a Chapter 7 and a Chapter 13 bankruptcy will delay a foreclosure while the parties wait on the bankruptcy court to allow them to proceed. Bankruptcy of course is a last choice that comes with it's own set of pitfalls, namely the damage to your credit. It's never a good idea to declare bankruptcy just because of the foreclosure alone.
Short Sales
In a short sale, you form an agreement with your lender for you to sell your house for less than what you owe. Of course, the bank doesn't like short sales because they lose money on the deal. It is still possible to have them granted by negotiating directly with your bank. One warning - short sales may have an effect on your taxes because the IRS considers short sales as income..
The Deed in Lieu of Foreclosure Option
If you are not able to keep the home, it may be better to avoid the bitter end of the foreclosure process by offering a "Deed in Lieu of Foreclosure". This is also helpful if you owe more than the home is worth and your bank will agree to it. A Deed in Lieu of Foreclosure is returning the property to the bank to stop foreclosure fast. It may be a good solution if you aren't expecting to keep the property.
All of these are common methods that people use to stop a foreclosure at the last minute. In an ideal world, you would have more time to decide what to do. When it comes to impending foreclosure, the more time you have the more options you have as well.
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