You may also qualify for the federal government's Home Affordable Modification Program, which would give you a chance to change the terms of your mortgage. Loan refinance: If you aren't terribly behind on your payments, you could work with your lender to lower your monthly payments by refinancing your mortgage.
If done ahead of time, this would likely have no significant impact on your credit scores. You may be eligible for the government's Home Affordable Refinance Program. Forbearance agreement: If you are falling behind on your mortgage payments for a temporary reason, such as short-term unemployment, you may qualify for mortgage forbearance. Under a forbearance agreement, the lender would suspend or reduce your mortgage payments for a period of time, after which you would pay back your missed or reduced payments.
Deed-in-lieu of foreclosure: There is a less common option that many believe may have a smaller negative impact on your credit scores than a foreclosure or short sale.
The bank may agree to either halt foreclosure proceedings or not pursue foreclosure at all. It is likely, however, that you will have to attempt to sell the property yourself for at least three months before a lender will agree to a deed-in-lieu of foreclosure.
The bank would much prefer that you expend the effort to sell your house than to take on that burden itself. We get it, credit scores are important. No credit card required. Knowledge Center. Reading time: 5 minutes There are few events in life as painful as losing your home.
Short sales It's a commonly held belief that a short sale of your home does less damage to your credit scores than a foreclosure. Ways to avoid a short sale or foreclosure Here are a few options that may have a less severe effect on your credit scores. Related Content.
Get your free credit score today! But even if you cannot avoid one, you still have options. The first step in recovering your credit is to get that C from your lender instead of a deficiency judgment. Your realtor can assist you in negotiating debt forgiveness as part of the short sale agreement. Your next step is to request that your lender accept a settlement offer.
If your lender refuses the settlement offer and you cannot afford to pay, you can file for a Chapter 7 personal bankruptcy to completely discharge the deficiency judgment debt. First, request a free credit report to review it for any errors. Better yet, request a report from all three credit bureaus to check for inconsistencies.
To submit a dispute online visit Experian's Dispute Center. If you have a current copy of your personal credit report, simply enter the report number where indicated, and follow the instructions provided. If you do not have a current personal report, Experian will provide a free copy when you submit the information requested.
Additionally, you may obtain a free copy of your report once a week through April at AnnualCreditReport. Some may not see improved scores or approval odds.
Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost. Learn more. Editorial Policy: The information contained in Ask Experian is for educational purposes only and is not legal advice. You should consult your own attorney or seek specific advice from a legal professional regarding any legal issues.
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This compensation may impact how, where, and in what order the products appear on this site. The offers on the site do not represent all available financial services, companies, or products. Measure content performance. Develop and improve products. List of Partners vendors. By Dana Anspach. Dana Anspach is a Certified Financial Planner and an expert on investing and retirement planning.
Learn about our editorial policies. Updated August 06, Fact checked by Lakshna Mehta. Article Fact Checked July 22, Lakshna Mehta is a writer, editor, and fact-checker.
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