The prospect of foreclosure is daunting for Connecticut homeowners. However, if you’re unable to make mortgage payments that will be exactly what you’re faced with. Some homeowners are able to pursue alternatives, which can prevent a lengthy and often costly foreclosure process. Realtor.com explains 3 different ways to avoid foreclosure that might be available to you.
Deed in lieu of a foreclosure
While you want to retain ownership of your home, in some cases that may not be possible. If your foreclosure is assured you can speak with the lender about deed in lieu of foreclosure, which allows you to return the title to the lender without the obligation to pay back your loan (although you may need to pay a portion of it). People can pursue a deed in lieu of foreclosure if they’re no longer able to afford their mortgage due to financial hardship and have been unsuccessful at selling their home for at least 90 days.
Sale or rental
Homeowners in a better financial state can try to sell or rent their homes using conventional methods. This is usually the best option for you if you haven’t yet been late on mortgage payments but no you’ll be unable to pay them in the future. Even if you have to decrease your asking price it’s better than losing your home in a foreclosure due to the impact on your credit rating.
You may be unable to sell your home for the amount you owe your lender. In cases of significant financial hardship, you can request a short sale, where the lender agrees to accept less than what’s owed and forgive the remaining debt. This requires providing evidence that you’re no longer able to pay the mortgage due to a change in financial status, such as a loss of income.