Many Americans are facing tough decisions when it comes to their mortgages and the fate of their homes. No one wants to lose their home to foreclosure, yet it is a very real possibility for many. Luckily, there are several ways homeowners can stay out of foreclosure and get caught up on their mortgage debts. However, not all of these options are best for everyone and knowing which one is right for you can prevent you from making a costly mistake.

Mortgage Loan Modification

A widely recognized concept for managing mortgage debts is a mortgage loan modification. The problem is, many people don't know really what they are or how they can help. A mortgage modification can help alleviate mortgage debts by lowering monthly mortgage payments.  To do this, the lender generally changes some of the terms and conditions associated with the loan. For example, the lender may temporarily lower the interest rate on the loan or suspend monthly mortgage payments for a specified period of time. Lenders may also extend the life of the loan or reduce the overall amount owed on the loan.

Mortgage loan modifications can be a great way to find help with your monthly mortgage payments and allow you to get caught up on missed payments. However, they are only for those who can afford to continue paying their mortgage payments long term. In other words, mortgage modifications are a temporarily solution that only provides relief for a short period of time. In the long run, you must be able to afford to keep up with your mortgage payments.

Short Sale

A short sale is one foreclosure alternative that can help you get out from under an overwhelming mortgage. When a home is sold through the short sale process, the lender generally agrees to accept less than is actually owed on the mortgage loan. You sell the home and submit an offer to the bank for approval. If the bank approves the offer, you will complete the sale process and give the proceeds to the lender in exchange for alleviating your from responsibility over the debt.

A short sale can allow you to find relief from a mortgage that you cannot afford to maintain. It is a permanent solution to your mortgage debts and should only be pursued if you (a) have enough time to navigate the process and (2) need to get out from under a mortgage debt permanently.

Deed In Lieu Of Foreclosure

Another permanent solution to a mortgage debt is a deed in lieu of foreclosure. This option allows you to get out from under your mortgage debt by signing over the title of your home to the lender. Essentially, you are giving up ownership to your property to the lender in exchange from being excused of your responsibility over the mortgage debt. This option should only be pursued if you do not have the time to navigate the short sale process, maybe because your home has already been threatened for foreclosure or you cannot afford to stay for a few months while you sell the house.

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