Mortgage Refinancing: What Is a Foreclosure Bailout?

In the area of mortgage refinancing, there is a type of loan known as a foreclosure bailout. Here are the basics of the foreclosure bailout.

Foreclosure Bailout

Instead of actually going through foreclosure, you can take advantage of a number of different options in front of you. One of the options is a foreclosure bailout loan. A foreclosure bailout loan is simply a refinance loan that allows you to pay off your existing mortgage so that you do not go into foreclosure. Your new lender is going to give you the money to pay for your mortgage with your old lender.

Considerations

In many cases, lenders are not going to want to work with someone that is close to foreclosure. However, if you can find a foreclosure bailout program, it will tend to be more lenient. In most cases, you are going to need to have at least 25 percent equity in your home before a lender will consider giving you a loan. If you are upside down on your loan or have very little equity, this is most likely not going to be an option for you.

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