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Foreclosure Bailout Mortgage

A Foreclosure Bailout Loan is a mortgage designed to save homeowners from having the properties being foreclosed upon by their banks. it is basically a refinance loan. The home owner takes out a mortgage to pay off the current loan thats in default.

When taking a forclosure bailout loan strongly consider paying the points to remove the prepayment penalty. This will allow you to fix your credit and get in a better loan quicker.

Foreclosure Bailout Refinances are based on the value of your home, and how much you owe your current mortgage companies. For this reason, most of these loans require an appraisal and an additional property valuation to complete.

Many lenders will lend as soon as 1 day after bankruptcy discharges.

You want to contact a Mortgage Professional as soon as you feel your home is in jeopardy, the longer you wait the more your credit becomes affected and the harder it is to get you into a more stable situation. Time is the key to saving your home.

A foreclosure bailout loan should be viewed as step one of a two step process to an affordable mortage payment. Expect a high interest payment on this type of mortgage bewcause of the risk factor. Once you have 12 months of on time new mortgage payments, you can then refinance into a low rate long term mortgage.

Most foreclosure bailout loans require at least 25% equity in the home and credit scores over 500. While many potential borrowers do not fall into this category there are some that do and can benefit from the bailout programs.

Any time a mortage goes 120 days late, most banks will consider that loan in default.

Be cautious of immoral predators if you are facing foreclosure. Many companies see your bad fortune as an opportunity to strip any remaining equity from your home, often leaving you both homeless and penniless. Carefully research and verify any company that is offering assistance, especially if the offer seems too good to be true.

When compared to the option of selling your home or loosing the home if foreclosure proceedings are completed, the higher interest rate associated with a bail out is usually the best alternative. These bail out programs are a form of refinance, they are not a lease back program. You still maintain ownership of the property.

A forclosure bailout loan will be costly and typically carry a higher interest rate because the lender's risk is so high.

When considering a foreclosure bailout mortgage, make sure you are working with a specialist in this area. Anyone in this situation is at risk of loosing their home so mistakes or time delays could have negative impact to the home owner. For example, the Foreclosure lenders know the specific laws and can determine if your current lender is doing everything it should be to help you avoid foreclosure.

The type of lender you are looking for in a foreclosure bailout is called an equity lender. They lend based soley on the equity in the home and not necessarily your credit score or credit history. This means they are protected by the higher risk should they have to take the property back. These are usually short term loans designed to keep someone from going to foreclosure. This allows you time to list and sell your property or get back on your feet again and refinance.

In some rare cases you may be able to pay off additional debts as part of a foreclosure bailout/refinance. If you have enough equity in your home this may be exactly what you need to get back on track.

For more information regarding this topic, please call Mike Williams at 516-921-9000 or email mwilliams@northshorefunding.com.