7 Ways to Save Your House from Foreclosure

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3 years ago

It’s the dream of most people to own a home. But, unfortunately, people work extremely hard to afford a house, and while it feels nice to achieve that goal, there is always that small risk of foreclosure. After all, a crisis can appear from anywhere.

Whether it’s something personal like an emergency medical situation or something to do with the economy, it’s always better to be prepared.

If your house is currently facing foreclosure, there are a few steps you can take to avoid it altogether.

However, everything has to be well calculated. One wrong move could have a domino effect, and the last thing you want is to get to a point where the foreclosure is entirely out of your hands.

Here are a few tips that will help you get a handle on things:

1. Short Refinancing

Short refinancing is a way to restructure your mortgage to something more flexible to your current financial position.

In such a situation, the lender will forgive some part of the money owed and refinance the rest to agreeable terms.

2. Reinstatement

As you know, the main reason why a house would face foreclosure is if mortgage payments are late.

However, there is a way to renegotiate with the bank through a process of reinstatement.

In essence, the bank will allow you to pay all late mortgage dues, including all the interests and penalties accrued, in one single lump sum payment before a specific date.

3. Loan Modification

You can also refinance your mortgage and extend its term to get more time to make payments.

In most cases, the lender will try to create a flexible loan that is tenable to your current financial situation.

However, most banks deal with this on a case-by-case basis. But in essence, you must convince the lender that whatever financial problems you face are just temporary.

4. Forbearance

Missing a mortgage payment can be caused by many things. However, if there is a valid reason why you missed that payment, the bank could offer forbearance.

For example, if you had a severe emergency like an accident or an unexpected medical crisis, you may qualify for forbearance.

In essence, this will allow the bank to restrain you from taking any legal action against you.

5. Hard Money Loan Refinancing

Hard money refinance is often seen as the last resort option. So, at first, most people ask their initial lender to refinance the mortgage.

But if the lender deems there is too much risk, they will deny that request. In this case, you can go to a private lender and get a hard money loan to refinance that mortgage.

While this will prevent foreclosure, you may incur very high interest from private lenders.

6. Pre-Foreclosure Sale

This is also another last resort measure, and it is often an option for people who are sure their financial situation is not going to improve anytime soon.

In a nutshell, you could, in theory, sell a home facing foreclosure and use some of that money to pay your mortgage.

But if you cannot afford to find another place to live, perhaps you could have a friend or investor buy the house from you and then lease it back at an affordable monthly rent.

This will give you just enough time to find a way forward while keeping your credit score high. It is, however, essential to note that not all homes qualify for a pre-foreclosure sale. Talk to your lender and see if you meet the criteria.

7. File for Bankruptcy

Filing for bankruptcy can also help you avoid foreclosure but temporarily. The only thing it does is buy you the time you need to catch up on your mortgage payments. But, of course, there is also a risk when you file for bankruptcy.

If you cannot catch up on the payments before the foreclosure suspension is revoked, then your goose is cooked.

You can try to apply for refinancing or even a hard money loan, but your chances of getting approved for that after bankruptcy is practically zero.

However, you may get some reprieve from Favor Home Solutions, a company that takes over mortgage payments in Chattanooga.


Many homeowners face foreclosures, but this doesn’t always mean you will lose your house. There are ways to fight this.

The tips above will help avoid foreclosure or at least buy you enough time to deal with your financial situation. In any case, you will get a chance to save your home.

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