Finding out your house is in pre foreclosure is something that is very scary, stressful and also very emotional. However, there are things you can do to stop the foreclosure process and save your home.

You may be able to qualify for pre foreclosure loan from a bank or another lender. No bank or lender wants to take possession of your home if they do not have to because they then have to sell it to recoup their losses. It is in the lender's best interest, as well as yours, to consider giving you such a loan.

As we said, you may or may not qualify for a pre foreclosure loan. In order to qualify, you should have a stable employment record and enough income to pay the loan back. When you get such a loan, it is usually a standard fixed rate loan for a period of 30 to 40 years.

The interest rate may be slightly higher than other traditional loans but when you pay the loan back over that long of a period, the payments go down significantly. The interest costs of your loan will go up with a loan obtained in pre foreclosure but you can always pay the loan off early, which will save you many interest costs.

Pre foreclosure loans and your equity

You cannot get a pre foreclosure loan for more than what your property is worth. That means lenders take into consideration the equity you have built up and what the real estate market is currently doing to home values.

The real estate market has always been up and down and up again over time but the general trend in the real estate market is an increase in house value. That means homeowners who have been in their homes for more than 5 years and did not have an interest only loan have at least a little equity in their home. If you have a home that is worth more than you owe or you have negative equity, you will have a hard time getting a pre foreclosure loan.

If you are able to get this loan, you will be saving your credit score from the hit it will take if your home goes into foreclosure. When you are in pre foreclosure, you can still use your good credit score to secure a loan. After your home is in foreclosure, your credit score will have been negatively affected and you will have trouble getting a loan without a high interest rate and without a large down payment.

You should talk to your mortgage lender about a pre foreclosure loan if you are in need of this type of loan.

Your lender is aware of your financial situation and may know why you are in this position so they can be more sympathetic than lenders who have never dealt with you before. Talk to your lender first but if they cannot help you out, seek out another lender and try to obtain a pre foreclosure loan to avoid a full foreclosure.

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