Life can become very stressful when you are struggling to make enough money each month to pay your mortgage. If you have a family, you will be worried about their future in this situation, as well as the prospect of losing your home.
If you believe that foreclosure is a significant risk, you should take action now to find ways to prevent such a scenario. One of the ways that you can tackle being unable to afford your mortgage is by looking into a loan modification or refinance options. The following are some options that could be available for you.
Home Affordable Modification Program (HAMP)
HAMP is a program that helps people to continue to afford their mortgage based on the fact that they now have a limited income. If they qualify for the program, their new mortgage rate will be set to 31% of their pre-tax income. This can result in a significant decrease in payments, thereby helping borrowers to avoid foreclosure.
Principal Reduction Alternative (PRA)
If your home is worth a lot less than the mortgage you have on the property, you may be able to address this through a PRA. This could help you to gain a reduction on your loan so that it is more representative of the property's market value.
A special forbearance may be available to those who are struggling to pay their mortgage because of job loss or the death of a spouse.
If you want to avoid foreclosure, there are many options available. The right strategy for you will depend on your specific circumstances, so it is a good idea to conduct thorough research.