Foreclosure/Bailout Mortgage Loans
Nobody wants to think about the possibility of losing his or her home. After all, you have built a life around your home and you have created special memories in it that cannot be erased. In addition, losing your home is financially devastating and it can be difficult to overcome the loss.
Unfortunately, many people are being forced to default on their mortgage loans because they don't think they have any other options. If you are unable to make your agreed upon payments on time, the lending institution has the right to start working toward repossession once you are 120 days late in making your payments. That is truly a scary thought!
Finding a Solution to Your Financial Woes
Fortunately, getting behind on your house payments does not automatically mean you are going to lose your home. In fact, with the help of a foreclosure/bailout mortgage, you might be able to save your home and get your mortgage lender off of your back.
In order to qualify for one of these special mortgage loans, you will need to meet certain criteria. For example, you need to have a credit score of 500 or more. Therefore, it is best to start looking into one of these loans before your credit has been dragged down too far by late mortgage payments. You also need to have a small enough mortgage left on your loan that there is at least 25% of the home's value available in equity. In other words, if your home is worth $200,000, the maximum amount of money you can get from one of these loans is $150,000 because only 75% of the home's value can be borrowed with a foreclosure loan.
Getting Your Foreclosure Loan
In order to qualify for a bailout mortgage, you will need to show the lender the paperwork about your foreclosure, your pay stubs, and your tax returns for the past two years. The bank will then make an appraisal of your home and will obtain a credit report. Since foreclosure loans are based on the equity of the home, they are generally fairly easy to acquire. After all, from the lender's perspective, it will be easy to make the money back if you default on the loan.
Once you have completed your paperwork, foreclosure loans usually become effective almost immediately. It should be noted, however, that these loans typically have a higher interest rate than other types of mortgage loans. Therefore, it is important for you to make certain you can afford the new mortgage loan payment amount before you enter into any agreements.
If you can afford your new mortgage loan payment amount, the foreclosure mortgage can be an excellent method for getting your finances and credit card payments back on track and avoid loan modification services. In addition, after about a year of making your payments on time, you can generally refinance these loans in order to get a lower rate. During that year's time, you should be able to increase your credit score in order to qualify for more attractive loan terms.
Generally, these loans also require paying points. If you are unable to pay the points, you may have to pay a prepayment penalty. This means paying back your loan ahead of schedule can result in certain fines. This practice is not legal in all states, however, so it is important to find out if it applies to your loan or not before you complete your paperwork.
If you have found yourself in a difficult financial situation and need a foreclosure mortgage loan to help you get out, contact FiveStarHomeMortgages today. We will be happy to help you find a way to get back on your feet!