If you have missed mortgage payments or are facing foreclosure, it is not too late to consolidate your bills and get back on track.  It might seem hard to imagine getting out from under the burden of debt that has accumulated, but there is always an option that can help repair your credit.

©Stuart Miles - freedigitalphotos

©Stuart Miles – freedigitalphotos

There are more and more services offering debt consolidation and loan modification.  Many of these emerging companies are prohibited from taking up-front fees from clients and homeowners.  You should always research any company you may be working with, and also if necessary involve your attorney to be safe.

Even if you have missed 3-6 payments and are facing foreclosure on your home, you may still have options that can help you to the road of recovery.  First, see if your lender is willing to work with you on any missed payments that have accrued.  They may be willing to offer some sort of loan modification program that can help repay the past due payments.  Sometimes this can involve building those payments onto the back end of the loan payment.

You should make sure that whatever modification being offered is affordable and will work in your best interest.  The last thing you would want to happen is to be digging a deeper hole than you are already in.  Lenders and mortgage companies may also make you pay a payment and a half which could make a property very difficult to sustain and afford on a monthly basis.

The US government is encouraging banks to be more accommodating when it comes to helping homeowners who have fallen behind on payments.  It may be a good time to look into restructuring the loan or refinancing at the current low interest rates.  If you are thinking of simply refinancing a mortgage on your property, make sure the closing costs and loan fees are manageable and that it makes sense to go ahead with the re-fi including these fees as costs to your bottom line.

Typically it takes 12 months of on-time payments for your credit score to be positively affected.  This means that if your bank or lender is willing to give you some time to restructure the loan, this is a short amount of time to get back on track and also stay in your property without losing it.  When you have bad credit it is often difficult to refinance the mortgage on your property, and therefore you only have a few options when it comes to saving the home from foreclosure.

The important thing to realize is that YOU DO HAVE OPTIONS.   Better to work out a loan modification or forbearance agreement with your bank than to let the property go through the foreclosure and auction process which can really tarnish your credit.  This makes it virtually impossible to get approved in the near future for any home purchase unless you drastically improve your credit score, but that usually takes some time.

Contact your lender today and see what options are available, you may be surprised that they are more willing to work with you than they were a couple months ago.

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