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Make foreclosure your last option by using these ideas first

Are you seriously behind on your mortgage payments? Are you worried that foreclosure is your only option?

Letting your house go into foreclosure is certainly one of your options -- but it really should be your last choice. Instead, you need to consider one of the many foreclosure alternatives available to you. Here are some of your choices:

1. Borrow enough to bring your mortgage current

If your financial difficulties were only temporary and you're almost back on track, consider borrowing just enough to bring your mortgage current. You may want to seek some advice from a financial adviser first, but you may be overlooking several possibilities. Your whole life insurance policy may have enough equity to support a small loan. Your retirement plan may also help. Relatives and close friends may also be willing to make you a loan.

2. Try for a loan modification

If you can make your current payments but can't catch up, you may be able to get a loan modification through your lender. The reality is that many lenders don't really want to foreclose -- they would much rather extend your loan a little and start getting regular payments again than go through the expense and hassle of foreclosing and selling your property.

3. Ask for a forbearance and payment plan

Your lender might be agreeable to a forbearance if the housing market in your area is fairly soft. This allows you to forgo your monthly payments for a few months while you get your finances back on track. Once the period ends, you start paying your regular payment plus a portion of the past-due amount until you've fully recovered.

4. Use a short sale agreement

Also called a "pre-foreclosure sale," a short sale allows you to sell your property for less than you owe and still satisfy your mortgage. That's far better than a foreclosure -- which can leave you on the hook for whatever the difference is between your mortgage and what the bank eventually gets when the house is sold.

There may even be more possibilities open to you. There are often multiple alternatives to foreclosure -- and it pays to check into all your real estate options before you make a decision.

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