With the economy in a recession, the government has put into play a lot of programs to help homeowners, and people looking to be homeowners. There are options out there for people who are struggling, and it doesn't hurt to try. If your experiencing a financial hardship with your mortgage, here are few tips to try:
1. Loan Modification: the bank may be able to modify your loan to make your payments easier to handle. Just as when you bought the home your mortgage rep figured how much you could afford based on your current income and debts, they will re-evaluate your situation and make your payments more affordable. The process is long, but starts with a phone call. Call you bank and find out if you can qualify for this program.
2. Short Sale: an option if living in your home is just not working out for you. A short sale means that you owe more money then your home is worth, and something has happened in your life to change your situation that does not allow you to afford the home anymore. This is a lengthy process, but with the right tools you can get through it. It starts with listing your home at "market value" regardless of what you owe. Your Realtor will gather all of your financial data and start to prepare the short sale package. Once an offer is received they will work with your bank to get you approved. Some offices work with attorney's to get this negotiated as well so ask your Realtor. This does affect your credit negatively, and you won't be able to buy again for 2 years, but for some this is the only option to be able to stay above water.
3. Deed in Lieu of Foreclosure: if you have completely lost your income, and can't afford to stay in the home another minute, you can ask your bank to do a Deed in Lieu. You will basically deed your property to the bank and they will take over. It affects you just as negatively as a foreclosure, but shows up as voluntary action on your credit report, to future creditors it looks better then an involuntary action.
4. Foreclosure: this would be a last resort. You simply walk away from the property and let the bank takeover. If this is something your thinking of, talk to a Real Estate Attorney to get more information.
5. Bankruptcy: maybe you want to keep your house but get rid of all your other debts. You can try filing for bankrupcty. Talk to a bankruptcy attorney to see if this option is right for you.
Whatever you decide to do, you will do it because it works for you and your families situation. Start with a phone call to the bank and find out what options they can provide you based on your specific situation, and always speak with a professional to find out the exact ramifications of each decision.
If you want to see if a short sale will work for you, email me at abeich1219@gmail.com and I will provide you with a complimentary CMA and tell you what the short sale will do for you. I work with a short sale attorney to make the process as smooth as possible.
For more information on the governments Making Home Affordable plan, visit http://makinghomeaffordable.gov/.
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