How to Refinance to Stop Foreclosure

If you have received notice that your home is being considered for a foreclosure proceeding, it's a good time to look into refinancing. Stopping the foreclosure is possible and refinancing your existing loan to bring about lower monthly payments is feasible. In fact, if you can refinance your mortgage to one with a longer term, you have improved your chances of stopping the foreclosure.

Things You'll Need

• Proof of income

Instructions

1. Contact the current lender of your existing mortgage. Discuss possible refinancing options through that lender. See if the lender will consider either a loan with a longer term or one with a lower interest rate, especially if the current market rates are lower than your existing interest rate. Either one of these strategies will lead to a reduction in the the size of your mortgage payment.

2. Try to improve your situation by getting small personal loans from family members. Use the money to catch up on your mortgage arrears. Only do this if you believe that you will be able to hold onto your home, otherwise you are simply throwing your family's money out the window.

3. Contact a housing counseling agency that has been approved by the U.S. Department of Housing and Urban Development (HUD). Since it has HUD's approval, it will be a legitimate company. Perhaps it can offer you contact information for government services or programs that will help save you from foreclosure. It might also be able to steer you in the direction of legitimate lenders or local community organizations that provides assistance to homeowners facing foreclosure.

4. Contact other lenders and see if they have a refinance loan to offer you. Be prepared for the lender to look at your credit rating, your income and your loan to value. Each of these factors will play into the type of refinancing that you will be able to obtain. In fact, the further behind you have fallen with your mortgage payments, the more difficult it will be for you to obtain a loan.

5. Seek out subprime lenders and see what terms they are willing to provide. Subprime lenders specialize in loans for people with bad credit. They are more likely to help you with a refinance loan to stop foreclosure on your home.

6. Complete some research online and see what online lenders have to offer by way of refinance loans.

7. Refinance your current mortgage and pay off your lender to stop foreclosure. Cut back on expenses or get a second job so that you can continue to make each payment on your refinanced mortgage so that you don't risk foreclosure in the future.

Tips & Warnings

• Ask for references when using a new lender or research the company to make sure that it is legitimate.

• Act immediately since even a few days can make a lot of difference when trying to refinance a mortgage to stop foreclosure.

• Be wary of any deals that sound too good to be true.