If you are having difficulty making your mortgage payments, you run the risk of a possible foreclosure.
In order to avoid this from occurring, your lender may offer several possible solutions to help stop foreclosure.
One option may be an interest only payment.
Although you won't knock anything off of the principal of your loan, interest only repayment plans will lower your monthly payments and let you keep your mortgage in good standing.
It's a good option in that you are able to avoid foreclosure.
This type of loan may only be offered for a period of one to two years.
A second common option is what is referred to as a half payment.
As the name suggests, your lender may cut the amount of your monthly payment by up to fifty percent.
Although not used as frequently as an interest only payment, it may be a good option to help stop foreclosure from occurring.
A third solution that may be offered is a short sale.
A short sale occurs when the mortgage holder lets the homeowner sell the house for less than is owed on the mortgage.
The benefit to the borrower is that the effect on future credit is lessened.
A fourth option may be to try to lower your monthly payments while still paying down the principal.
While you're discussing this possibility, see if you can negotiate a lower interest rate.
Even a quarter of a percent can make a big difference in the bottom line.
Always remember that a lender is not anxious to foreclose on your property.
It's expensive as well as time consuming for them, so they would prefer to work to avoid foreclosure.
Now, although your lender may be willing to offer one of these options to you, to help stop foreclosure; only you can decide which is best for you.
Be sure to investigate all options before making a commitment.