It is not unusual for a homeowner to feel very helpless once the possibility of a foreclosure dawn on him. While foreclosure happens almost everyday in America, it is a fact that every American also dreads. The possibility of losing one’s home is just too much to take considering the alternatives present to a family with financial difficulties. But the fact is, you can do something about your situation. There are actually many options that homeowners can take and choose from in order to address their financial challenge as well as avoid foreclosures.

Your Best Options

There are a myriad of reasons why a homeowner misses payment on his mortgage and it could be due to a sudden unemployment, health crisis, death in the family, divorce, job demotions, displacements and even the inability to cope with just too many debts. But this does not mean that a homeowner should just accept his fate and surrender his home to a foreclosure action.

The best thing, of course, to do is to contact your bank as soon as a problem arises in your mortgage payment. A bank or lender may be more willing to take your side and wait for a time before taking legal action against you. And if you can negotiate and explain your side fully and honestly, then you may be able to secure a repayment plan.

One of the ways to avoid foreclosures is to spread out your missed payments over an agreed upon time for you to be able to catch up with your loan obligations. But make sure that you can handle the adjusted monthly payments so that you avoid further missing on them.

You may also apply for a loan modification which will ease your monthly payments to a more reasonable amount. There are instances where a bank could cut interest rates for you to bring down your mortgage payment. At other times, the lender may also extend your amortization period so you can pay your loan in a lesser monthly amount.

Other homeowners prefer to re-amortize their loans and include their back payments on to the end of their mortgage terms.

If any of these does not work, a homeowner still has a choice to consider a short sale to mitigate the effects of a foreclosure on his credit. A short sale will allow borrowers to sell their homes and use the proceeds to settle their accounts with their lender and still avoid foreclosures.