Creative Ways Texans Are Saving Their Homes (Or Their Equity)

When money gets tight and foreclosure notices start showing up, it can feel like the walls are closing in. But across Texas, homeowners are finding creative ways to hold on to their homes—or at least protect the equity they’ve worked so hard to build. Let’s look at some of the paths people are taking.

Table of Contents

• Loan Modifications

• Repayment or Forbearance Plans

• Selling Before the Auction

• Renting the Home Out

• Cash Offers from Home Buyers

• Bankruptcy as a Last Resort

Loan Modifications

For some homeowners, working directly with the lender to change the terms of the loan can be a lifesaver. This might mean lowering the interest rate from, say, 7% down to 5%, or extending a 20-year loan into a 30-year term. These changes can reduce the monthly payment by several hundred dollars. In some cases, missed payments are rolled into the back of the loan, giving homeowners a fresh start.

Repayment or Forbearance Plans

If the hardship is short-term—like recovering from a job loss or medical bill—lenders sometimes allow repayment plans. For example, if you’re three months behind at $1,500 per month, a repayment plan might let you pay your regular $1,500 plus an extra $250–$300 per month until you’re caught up. Forbearance plans, on the other hand, pause or reduce payments for a set time, typically 3–6 months, while you get back on your feet.

Selling Before the Auction

When keeping the home isn’t realistic, selling before foreclosure can be the smarter financial move. In many Texas markets, homes have appreciated quickly—so even if you’re behind on payments, you may still walk away with tens of thousands of dollars in equity instead of losing it at auction. For example, a homeowner with $40,000 in equity could use a quick sale to pay off the lender and pocket what’s left.

Renting the Home Out

If moving out is an option, renting can turn the property into an income source. In cities like Dallas or Houston, a 3-bedroom home might rent for $1,800–$2,200 a month, which could more than cover the mortgage. This strategy works best if rental demand in your neighborhood is strong and the home doesn’t need costly repairs.

Cash Offers from Home Buyers

Investors and home buyers often step in with cash, sometimes closing in as little as 7–10 days. While the price may be below full market value, the speed can stop foreclosure in its tracks. For someone with $25,000 in equity, accepting a quick cash offer might mean walking away with most of that money instead of losing everything at the courthouse steps.

Bankruptcy as a Last Resort

Filing for bankruptcy can trigger an “automatic stay,” which halts foreclosure immediately. Chapter 13 bankruptcy, in particular, lets homeowners set up a 3–5 year repayment plan to catch up on missed payments. It’s not without long-term credit consequences, but for families with significant equity or income, it can buy the time they need to stabilize.

The bottom line is: foreclosure doesn’t have to be the only ending. Texans are resourceful, and there are multiple paths to either stay in your home or walk away with your equity intact. Exploring your options early—and running the numbers on each—gives you the best chance of coming out stronger.

— Miles, Lone Star Home Buyers