If you receive a foreclosure notice from your bank, it's easy to believe they're the enemy. This can lead you down the wrong path, such as hiding from the lender as you attempt to figure things out on your own.
Rather than take this approach, it's important to understand that your bank is actually on your side. Usually, they don't want to foreclose on your home but would rather help you work things out.
There are many ways your bank can help you stop a foreclosure, such as:
- Increasing the term of your loan: When you extend the number of years to pay back the loan, you're left with a lower monthly payment. This may allow you to stay on track more easily in the future.
- Adjust your interest rate: This can mean one of two things. First off, your lender may agree to lower your rate, thus saving you on finance charges. Also, they can convert your adjustable rate to a fixed rate, which eliminates the potential of your payment increasing.
- Forgive fees: When you miss mortgage payments, it's safe to say you'll rack up late fees, interest charges and bank legal fees. Your lender may be willing to forgive some or all of your fees to get you back on your feet.
A foreclosure notice is a big deal, but it doesn't mean you're going to lose your home in the near future. You have the opportunity to negotiate with your lender, all with the idea of saving your home and protecting your legal rights.
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