A job loss or unexpected medical bills can make it difficult to pay the mortgage in full and on time. If this continues, the lender may begin the process of repossessing the home, which is foreclosure.

It is important that homeowners understand that foreclosure is not always the only option. If owners take steps early enough, it is possible to keep the home.

Take proactive steps early in the process

Although it is tempting to ignore overdue bill statements, Forbes discusses the importance of taking steps right away once the mortgage is late. One step is to read all correspondence from the mortgage lender, because it gives information about how to prevent foreclosure. One of the earliest steps is to call the lender and discuss the inability to pay. Most companies are willing to help and have assistance programs available to keep people in their homes.

It may also help to speak with a pre-foreclosure counselor. This person has the information and advice on prevention options as well as what to say to the lender to receive a more positive response.

Foreclosure alternatives

According to FindLaw, the lender or counselor will outline a number of options, based on the homeowner’s situation. For those who are able to pay, two options are forbearance or modification. With forbearance, the lender arranges an alternate repayment plan or temporarily suspends payments. With modification, the lender may extend the loan’s terms or refinance the debt so it is more affordable.

For those who can begin paying back the original payment amount, it may be possible to get a one-time disbursement from the FHA-Insurance fund to make the mortgage current.

For owners who are unable to pay, one option is to sell the property to be able to pay off the loan. A last option is to give the lender the deed of the property. In this case, the person loses the house, but there is lower damage to credit.