About .5% of homes that are purchased eventually fall into foreclosure. While today’s economic landscape has been strong enough that foreclosures are at a minimum, that’s not to say that nobody is struggling.

Things like an unexpected illness, the loss of a job or the death of a family member can send responsible people into financial turmoil that pit them face to face with the possibility of losing their home.

If you’re one of those people, below are some tips on stopping foreclosures that could help you keep the roof over your head.

1. Pay Your Mortgage’s Balance

In an effort to disclose all of your potential solutions, we’re opening our discussion with the obvious stopping foreclosures option of paying off your debt.

If you have the money to pay what you owe to the bank but haven’t gotten around to writing a check because you’re managing other things, make paying your mortgage a priority. No matter how complicated your life is, believe us when we say that losing your home is only ongoing to make things harder.

If you don’t have the money to pay your past-due balance, borrow money from another lender to catch up on your mortgage.

It may be hard to secure another loan while you’re struggling to manage your existing debt. If you can though, it’s preferable to keep your home paid and fall into debt with a separate lender that can’t easily take your house.

2. Request Forgiveness

If paying back your overdue mortgage in one swoop isn’t an option, your next best bet is to talk to your lender. Lenders, in almost all cases, would prefer not to foreclose on your home. Foreclosures cost lenders time and money that they’d rather spend doing other things.

Because of that, you’d be surprised by how willing some lenders may be to work with you.

The biggest ask that you can request from a lender when striking a deal is to forgive your overdue debt with the promise that you’ll stay consistent with your payments going forward. While requesting debt forgiveness is a good jumping off point, know that forgiveness is rarely obliged.

3. Spread Your Past-Due Debt

When requests for loan forgiveness are unsuccessful, see if your lender is willing to spread out your past-due balance over the remainder of your loan’s term as an alternative.

For example, let’s say that you’re overdue $1000.00 and have 50 more payments to make on your house. Rather than paying that $1000.00 upfront in addition to your current month’s mortgage, lenders may be willing to spread those $1000.00 over the 50 payments that you owe them to make things easier to manage.

4. Fight for a Reduced Interest Rate

Another avenue that you can take that may reduce your payment obligations enough to get you back on track is to reduce your mortgage’s interest rate.

Homeowners routinely fall behind on payments because they opted-in to a variable interest rate that has gotten too high to comfortably afford. Lenders might be willing to freeze your variable rate to keep it from spiraling out of control any further. They may also be willing to convert your mortgage from a variable to a fixed-rate to add stability to your payment obligations.

5. Change Your Loan’s Length

People that are falling behind on 15-year mortgages are in luck because they can reduce their monthly payments steeply by converting their 15-year mortgage to a 30-year one. 30-year mortgages are more expensive in the long run given their higher interest rates and the additional time that interest will have to accrue. Despite that, monthly payments should be 30% or so less than what you’d pay on a 15-year mortgage.

6. Get Your Loan Refinanced

Your current lender may not be interested in working out a deal that would result in you keeping your home. In these cases, your next best stopping foreclosures option is to talk to another lender.

An external lender may be willing to purchase your existing loan debt under improved terms. This process is called “refinancing” and lenders do this so they can collect interest payments from homeowners like you rather than letting their competitors get your business.

Refinancing a house that’s on the verge of foreclosure represents a risk to new lenders that will keep many from helping you. That being said, if you can make a compelling case as to how you plan on keeping up with payments going forward, you might find an institution that can help.

7. File For Bankruptcy

Bankruptcy is bad but the consequences of foreclosure can be much worst. Because of that, if keeping your house is important to you, talk to a lawyer and see if they can file Chapter 13 bankruptcy on your behalf.

Chapter 13 bankruptcy will allow you to retain assets like your home so long as you make reduced payments to your lender. Once bankruptcy has been filed, your lender will have to halt foreclosure proceedings.

Foreclosure proceedings can start back up again if you fall back behind on payments.

Stopping Foreclosures Can Be Arduous but Keeping Your Home Is Worth It

Having to talk to your lender and negotiate with them when they’re unhappy with you for not meeting your obligations doesn’t make for a memorable weekend afternoon.

Still, stopping foreclosures is always less emotionally draining than getting foreclosed on. Put forth the effort necessary to keep your home and there’s a good chance that you’ll be successful.

If you find yourself in need of additional home, foreclosure or money management advice, check out more of the content related to those topics on our blog!