When attempting to refinance to avoid foreclosure and save your home, very often your credit cannot be considered for the purposes of qualifying for the loan, either because your credit score is below 500 or you have received a notice of default or are 90+ days late on your mortgage. For this reason, all lending decision made by the investor or lender who helps you refinance are based on the property value first. Property values are so important in refinancing to save your home that investors will often require two or more valuations before finally agreeing to help you. This is because when they can’t rely on your credit score to help them make a lending decision, they must rely on the value and condition of your property, because if you default again, they need to know they can recover their investment. A popular type of property valuation, used in almost all refinance transactions, is an appraisal. You probably had an appraisal conducted when you purchased your property, or the last time you refinanced it. In a full appraisal, a state licensed and certified professional whose specialty is in valuing homes will visit your property, inspect it inside and out, and take photographs, measurements and other key information about the property. The appraiser will then look at sales of comparable properties throughout the neighborhood to help him develop a value for your home. A well written and researched appraisal from an experienced appraiser can be the difference between saving your home and losing it, so work with your refinancing specialist to identify an appraiser who really knows the neighborhood well and has a clean administrative and disciplinary record with his licensing body. Broker price opinions, or bpos, are a very common appraisal review which lenders use to determine whether or not a particular appraisal is accurate. In a bpo, a real estate agent, broker or realtor will be asked by the lender to visit your home and to give their opinion of how much it might sell for in 30 days and then again how much it would sell for in 90 to 120 days. The 30 day quick sale value is generally the figure which most investors will look most seriously at, because if sales are very slow in your neighborhood this number can be much lower than the 90 to 120 day number, which means that it may cost them quite a bit of money to dispose of the property in the event of a future default. Some bpos have interior photos taken, some are just drive-by appraisal, but all of the develop their property values from comparable sales in the neighborhood. Noticing a trend here? When you first begin looking into saving your home, we may decide that it may be advisable to run an avm or automated valuation model appraisal. This is a computerized process by which comparable sales in your area are combined with your square footage and other factors to determine what your home might sell for. Avms are notoriously reliant on the accuracy of public records of title recorded in your county courthouses, but can help you identify discrepancies in square footage or the number of bedrooms and baths reported for your property, as well getting a ballpark estimate of the property value you may expect to receive, before spending money on more expensive appraisals or bpos.

Property value is one of the most important factors in determining whether or not you can save your home from foreclosure, but just as important is the current condition of the property. If your property is poorly kept, the appraiser may indicate that you have substantial cosmetic deferred maintenance. If your home’s interior or exterior has broken fixtures, windows, frames, siding, or other cosmetic items which could stand a coat of paint or some spit and polish, be sure to dress them up for the occasion prior to an appraiser or realtor showing up. Cosmetic deferred maintenance in excess of a few hundred dollars will indicate to the investor that you lack pride of ownership, which we define elsewhere in this article, and may prevent you from obtaining the mortgage refinance you need to save your home.

In some cases, you may be better off refinancing your present loan which is in default as opposed to doing a workout with your present lender. By getting a new loan, you relieve the pressure surrounding the foreclosure process.

Saving your home from foreclosure begins when you first realize you may be forced to miss a mortgage payment. When times get tight, make your mortgage payment your first priority, over your car and your credit cards. Good mortgage history can help you refinance and consolidate all of your high interest bills, but missing mortgage payments is a sure fire way to run the risk of foreclosure.

Saving your home from foreclosure can be a difficult process if you don’t get the right kind of help. Borrowers who work together specialist whose focus is helping people refinance out of foreclosure have a much better chance of saving their homes than homeowners who try to face foreclosure alone, or who apply to conventional lenders for help curing a default. Refinancing can be one of the best options for borrowers who want to save their homes with substantial equity in the property. There are many facets of the foreclosure process which can help and hurt you your chances of saving your home. The major concepts include, but are not limited to: pride of ownership, property value, minimum loan amount, loan to value ratio or ltv, equity, arrears, bankruptcy, below 500 credit scores, notice of default or nod, judicial and non-judicial foreclosure, lis penden, closing costs, hard money, forbearance, payment agreements, workouts, loss mitigation, foreclosure redemption, cosmetic deferred maintenance, foreclosure bailout for self employed borrowers, stated income vs. Full or verified income documentation, refinancing to convert adjustable rate arm to fixed rate, net tangible benefit, short sale and sale-leaseback alternatives, and much, much more. With so much terminology surrounding the foreclosure process, it’s easy to throw up our hands and say how will this help me save my home?. We will briefly discuss some of these topics here, and talk about how they may affect your chances of stopping foreclosure and saving your property.

Public records such as a tax lien, mechanic’s lien, foreclosures, and notices of default can drive your credit score down very quickly.

Even though each credit reporting agency reports information differently, most will contain the following:-identifying info, like your name, address, social security number, date of birth, and employment information are all used to identify who you are. Keep in mind that these factors are not used at all in calculating your credit score.-trade lines, which, essentially, are your credit account, new and old. Trade line information typically included the type of account, date you opened the account and the accounts credit limit or loan amount, among other things.-credit inquiries. Basically, whenever you apply for a loan, you give permission for the lender to request a copy of your credit report. This is how inquiries show-up on your report, which also provides a list of everyone who has accessed your credit report within the last two years.-any public record information from state and county courts, including bankruptcies, foreclosures, law suit’s, wage attachments, liens and judgments.

Many borrowers choose to refinance using a hard money or hard equity loan when their credit scores fall below 500. This is permissible provided that the borrower benefit’s from the refinance, for example in cases where they face foreclosure or when it is possible to refinance and take cash out to consolidate their credit card debts, thereby potentially improving their credit over time.

Hard money or hard equity refinances are very popular amongst borrowers who are facing foreclosure, because they cannot qualify for conventional loan programs once they have become 120 days late on their mortgage.

Most hard money lenders will lend up to 70% of the value of your property, whether it is for a new construction or to save you from foreclosure, without looking at your credit. The rates which they charge are generally higher than those you would expect if you qualified for a conventional mortgage, and the closing costs are generally higher because of the risks involved in lending to a person or party without qualifying credit.