If your house is about to be foreclosed, you can turn to commercial or residential foreclosure bailout loans to help save your house or business property from getting foreclosed on.But how do they work?
They are basically refinance loans that uses the equity on your home as collateral. Unlike other refinance loans, though, they are issued by third-parties. When facing foreclosure, a good place to start would be your lender and rework the terms of your mortgage. However, this isn’t always possible as there banks that don’t work with clients. And that's the reason why bailout lenders exist.
If you search for “foreclosure bailout loans” online, you will see that there are many lenders out there that offer bailout loans. Should you apply? That really depends on whether or not you have thoroughly explored all other financing options but have come up short. A bailout loan is expensive and the requirements usually do not apply to most homeowners facing foreclosure.
For example, we saw a lender that required 40% equity on the home and for the borrower to have a credit score of at least 500. Most homeowners don’t have such a high credit score. Still, if staying in your house is priority and you have explored practically all other options like private lending, go ahead and look for a foreclosure bailout loans lender even if you don't qualify.
It is easy enough to find one operating in your state by doing a Google search. However, just like anything, not all lenders are created alike and there are lenders that are better than others. Some genuinely want to help while others just want to bleed you financially.
The best way to find a lender is by using a broker. Again, like lenders, you can easily find a broker through Google search.
Get a quote from at least three lenders and compare their interest rate and payment terms and conditions. More important, look up the lenders’ name on the Better Business Bureau (BBB).
The BBB receives complaints against business operating in the United States. If you look up the name of the lendee, you will see if there are any pending client complaints.
Bailout loans vary in amounts. Some lenders offer it in the range of $100,000 to $5 million while others offer more – or less. Amortization can last up to 30 years depending on the lender. Loans typically close in 30 to 60 days and you get the money soon after that. As for the interest rate, we have no information on that since most lenders don't make the information public.
When it comes to foreclosure bailout loans, time is a double-edged sword that can be your friend or enemy. If you act fast, you can work out to restructure your loan with the original lender, find cheaper financing from peer-to-peer lending websites, or even negotiate a better deal with your bailout lender. But if you don't act fast, you could be cornered into a lending deal that will leave you with no room to breathe.