Are you facing foreclosure? One option you might have considered is refinancing your loan or taking out a reverse mortgage to put a stop to the foreclosure. These are both strategies that have been used by homeowners to avoid foreclosure. However, they do have a number of risks associated with them. In this week’s blog, we’ll talk about some of the risks that come with using a loan to stop foreclosure, and an alternative that you might want to consider.
Using a Loan to Stop Foreclosure
The idea with refinancing is you take out a new loan, which you use to pay off your existing loan. This includes the amount you’re delinquent on.
There are several risks with this strategy. First, it’s usually hard for someone who is facing foreclosure to refinance, because the lender will see that you’ve fallen behind in your payments, which will make them hesitant to loan to you. Second, even if you’re approved, you might not get a good interest rate, which can make it easy to fall behind in payments again. This is the kind of situation that leads to second and third mortgages, and a big financial mess.
With a reverse mortgage, the lender pays you a monthly payment or extends a line of credit based on the equity in your home. The thing that attracts many people to reverse mortgages is that there are no income or credit-based qualifications. “This means that even if you are behind in your payments, you may still qualify for a reverse mortgage loan so long as you have enough equity in the property.”
Right there is the problem. If you don’t have enough equity in your property, you won’t qualify for a reverse mortgage. And even if you do, the reverse mortgage will become due and payable when you sell the property or if you default on mortgage obligations like paying taxes or insurance. So, you’re still in an uncertain financial situation with a reverse mortgage.
A Loan Alternative
While a loan might work, there are a lot of risks associated with trying to use one to prevent foreclosure, and these options generally aren’t used that much. One alternative is to sell your home outright. We know what you’re thinking. There’s no way I can sell my home in the short time frame I have left. But with Grays Home Solutions, you can.
Grays Home Solutions is a home buyer in Maryland and throughout the Tri-state area that has been helping homeowners avoid foreclosure without having to go through bankruptcy. We offer:
- A fast sale. We’ll buy your house in 7 days or less.
- No repairs. You won’t have to make any repairs on your home.
- No fees.
- Payment. Depending on your situation, we may be able to pay you in cash.
When it feels like you’ve been backed into a corner, contact Grays Home Solutions. We’re a free service, and our number one goal is to find a solution that works for you, and help you stop foreclosure.
Use our fast response contact form to get in touch with us online, or call us direct at 240-347-3141 for even faster service.