Facing foreclosure (or house repossession) is probably one of the worst things you’d ever have to deal with. Your home is your shelter, you comfort zone, the place you go to get away from everything else. Having to deal with house repossession will affect every aspect of your life. Not only do you have to deal with the short term effects, such as finding a new place to live and moving, but you also have to live with the long term effects as well, such as bad credit and negative background checks. The best way to stop house repossession is to know what options are available to you.

One of the most effective options to stop house repossession would be to develop a repayment plan with your finance company. If you’ve just missed a few payments and want to get back on track this is the best option. Usually you can have your delinquent balance distributed over a period of time. Usually this payment plan would last no longer than 10 months but the delinquent amount would just be added onto your current mortgage payment. With the least amount of negative impact on your credit this option brings your account up to date within a specific time frame and allows you to move forward secure in the fact that you stopped your house from being repossessed.

Another option that can usually result in little or no negative impact on your credit is loan modification. This option generally adds any past due amounts back into the loan and is amortized over a new term. In essence you’re refinancing your loan along with all of the past due interest, principal, and escrow balances included. This can stop house repossession because the new mortgage note is giving you a fresh start and brings your account up to date immediately.

A short sale is also a viable option to stop house repossession. A short sale allows you to sell your house and use the proceeds to pay off the mortgage. This varies from a regular sale because your home’s market value is less than the total amount you owe on your loan. This means the finance company still takes a loss but you avoid the lengthy legal process of house repossession and generally a short sale is does less damage to your credit rating than a foreclosure. Rather than 10 years on your credit report short sales generally roll off in about 3-5 years.

These are probably the easiest and most common ways to stop house repossession but you can always try to think outside of the box. There are more creative ways to stop house repossession such as partial clams for FHA loans or even as a last resort you may have a deed in lieu of foreclosure option (similar to a voluntary house repossession) so work closely with your finance company to try and determine what solution will best fit your needs. Be open and honest with them about what your intentions are and try to come up with something that will have the lowest effect on your credit rating. The last thing you’d ever want on your credit report is house repossession.