People across USA and UK are increasingly being faced Foreclosure. Giving the property to the bank is now very common. It is also a very confusing process. It is important that you keep your head cool and find the way to prevent foreclosure and check your all option as early in the process as possible. Due to little awareness of refinance that they can save their property, they loose their home. You can improve your credit by foreclosure refinance.
Refinancing is not a normal refinancing. When you apply for a conventional mortgage refinance, lender generally looks at your credit history and decides whether you are applicable for new loan or not. If you have not been more than 90 days late on your mortgage payments, and your FICO credit score is above 500, conventional lenders can refinance your application. If your credit score is not satisfactory, none of lender will look at least once even you are in very better financial situation. If your credit score falls below 500, none of lender will take the risk.
Nothing is special for banks. They will deny your application and foreclose your property and sell it to highest bidder in the auction.
Now you need a person who is specialist of refinancing foreclosures. There are only few out there. There first question would be about your equity of home. They will ask about gross equity percentage of your home.
Gross equity percentage= (value of home – Mortgage) /100
Foreclosure refinancing is the game of equity and your credit history can not be considered for the purpose of loan. So question is how you could qualify for loan. Lender who is expert in foreclosure refinancing will ask for appraisal review performed by a realtor. This process is called BPO (Broker Price Opinion).
Example: if you have 40% more equity and your property is valued at $150000 or more, you will be qualified for foreclosure refinance and you can save your home from auction. You need very accurate money. Some time you could have little bit less equity then you will be not qualify for foreclosure refinance. Need of equity for qualifying the foreclosure is different in different states. There is little bit luck matter.
2 Mortgages:
In order to qualify foreclosure refinance, total of both mortgages should not be more than 70% of the value of home.
Foreclosure clock move very quickly. So you would have very little time to save your sweet home. The clock starts ticking when you get the notice that your mortgage payment has been due 120 days past. This type of notice is called NOD (Notice of Default).
Your first priority should be save your home and a foreclosure refinance is short tem loan with a fixed interest rate for 2 or 3 years. This gives you enough time to get your credit back together and refinance at the end of the fixed period into a much lower payment. Since you have shown to your current lender, credit reporting company and every other lender that you are not eligible to make your mortgage payment so there is substantial risk in lending you money to prevent the foreclosure and financing will be at very high rate. This is a very special situation. Not much people is aware of it. Don’t kill your time talking to lenders who don’t aware the foreclosure process. You are now closing of possibilities of loosing your home. There is very special type of lenders for this financial process. You will need to search him fast. They can even help to save your home if you can not qualify foreclosure refinancing with a little margin.
