When most people hear the word “foreclosure,” they get nervous. Foreclosure means potentially losing your home through the inability to make mortgage payments. It also is an unfortunate sign of the times for millions of people.

The worst thing about facing foreclosure is the feeling of powerlessness that can accompany it. The only way to overcome that feeling is to do something about your foreclosure situation. One option that may be available to you is refinancing your mortgage.

Foreclosure Is An Increasingly Common Problem

Anybody who reads the paper or watches cable news shows knows that foreclosure is a looming and serious problem for countless millions. Usually, you receive a foreclosure notice from your bank after several months of failing to pay your monthly mortgage payments.

Foreclosure can be caused by a number of factors. It could happen due to losing your job. It could arise when your adjustable rate mortgage (ARM) changes (resets) into its variable interest phase, which could drive up your payment amount. Or, it could happen when some other event in life (such as an accident or serious illness) crops up, leaving you with little money to pay the bills.

How Refinancing Can Help If Your Home Is In Foreclosure

What is refinancing? Refinancing your home is basically the act of replacing your existing mortgage with a new and better one. In this case, a better mortgage can mean:

a. Lower monthly mortgage payments

b. Cash out for use in paying off other debts, college tuition, and the like

c. A lower overall loan cost

Cash Out Vs. Streamlined Refinancing

There are two types of refinancing: cash out and streamlined. Most people in foreclosure are underwater, meaning they owe more on their home than it is worth. If that describes you, you will want a streamlined refinance.
However, it is possible to be in foreclosure when you have some equity in the home. In that case, you can use the cash in your home to make several months of payments. Go for a cash our refinance.

Here Are 3 Tips On How To Refinance While Your House Is In Foreclosure

If you believe refinancing may be your ticket out of foreclosure, here are 3 tips that can help:

1. Get mortgage refinance quotes from multiple lenders: It is always wise to see if your current lender will allow you to refinance you home. Even if they are likely to help you out, try approaching at least 3-5 other lenders first. Once you have an offer or two in hand, ask your lender if they can meet or beat it.

2. Talk to the U.S. Department of Housing and Urban Development (HUD): If your lender is not helpful, find out if the HUD can help. They can connect you with legitimate lenders.

3. Consider an FHA loan: The Federal Housing Administration approves a number of lenders to offer refinancing to homeowners with troubled loans and less-than-perfect credit. Be sure to give them a try. Make sure to compare multiple lenders, not just one.

Follow these 3 tips for refinancing while your home is in foreclosure.

Author Bio: To get more tips about refinancing while your house is in foreclosure or to find an FHA-approved lender, check out: Avoid Foreclosure Through Refinancing.

Category: Finances
Keywords: Refinance While House Is In Foreclosure,3 Tips On How To refinance on your foreclosed home