Facing Tough Times: How to Use a Mortgage Loan for Foreclosure
Many homeowners find the prospect of foreclosure terrifying. Not only do people lose their homes due to missed mortgage payments, but they also suffer damage to their credit that prevents them from being able to secure a loan, purchase a car, or even get a job. If you're facing foreclosure, there are solutions available to clear your debt and stay in your home. One of these solutions is alternative mortgage lending. Here's what you need to know about obtaining a mortgage loan for foreclosure.
Alternative Mortgage Lending vs. Traditional Loans
Taking a traditional loan will effectively stop a foreclosure – that is, if you can even get approved for one. Prime lenders like banks and credit unions use your credit history to determine the rate of your loan. If you have missed mortgage payments on your credit report, you'll be charged an extremely high interest rate or be denied financing altogether. Fortunately, traditional lenders aren't the only option for those seeking a mortgage loan for foreclosure.
Alternative and private lenders are available and can approve a mortgage loan for foreclosure, even if you have bad credit. Provided you have at least 10 percent equity in your home and are steadily employed, you can obtain the financing you need to stop your foreclosure and remain in your home.
How to Use a Mortgage Loan for Foreclosure
Compared to a traditional loan, an alternative mortgage loan for foreclosure carries a higher interest rate and has a shorter term. The idea is to use an alternative mortgage loan as a sort of interim loan to avoid damaging your credit with a foreclosure. Once you're back on track financially and your credit rating has been repaired, you'll be able to qualify for a traditional home loan at a sub-prime interest rate.
If you're facing the possibility of losing your property, we can help you explore your options for paying off what you owe and staying in your home. Contact us for more information about obtaining a mortgage loan for foreclosure.
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