| A stop foreclosure loan can be the solution to your problem if you find you are having trouble making your regular mortgage payments. In general, it's better to apply for this type of loan before you have come to the point that you have to skip a loan payment as this will help your credit. But a loan to keep you away from foreclosure is a possibility, regardless of your credit rating or your past history.
Your first step is applying for the loan. Keep in mind that lenders will be examining three things: your credit rating, your income and the loan to value ratio. If you are less than two months behind on your mortgage payments, your credit will most likely not be too much of an issues. If you are more than 2 months behind, your lender may require a higher stable income and equity in your home than if you are less than 2 months behind.
Even if you find that you do not meet the requirements for certain loans, keep in mind that exceptions can often be made to the rules, depending on the lender. Non-traditional foreclosure lenders and private foreclosure lenders tend to be much more lenient with these guidelines so don't lose heart if you feel that you are unable to save your home from foreclosure. The most important action is the action itself. The sooner you start working on your problem, the better your chances are for the results you are hoping for.
Another alternative to the stop foreclosure loan is to apply for a loan modification which can lower your monthly payment and even eliminate your arrears (owed payments that you have missed). All situations differ but in many cases your lender would rather modify your loan than have you go into foreclosure. In the past, loan modifications were hard to come by. But this has all changed in the face of new lending laws and government assistance. In any case, it's always a good idea to hire an attorney or mitigation expert if you can afford it. This is because when it comes to requesting the loan modification, it's important that it is done right the first time because it's hard to get a second chance once you've been turned down. So, you do not want to try it on your own.
There are several modification programs and loan bailout plans. The best ones are offered to those who have never been late on a payment which is why you really need to start the process before you get into trouble. However, there are other plans available only to those who have paid late or missed payments completely. The first step in qualifying for a loan modification is to prove there was a hardship or lender misconduct that caused the loan to become a problem. Your income will then come into play and whether or not you qualify for a loan modification will depend on the requirements of the particular lender.
Remember. . .your first step when you start to struggle with your mortgage payments is to speak to your lender. Next you can try for a loan modification and your last resort should be a stop foreclosure loan from a third party. |