If you have mortgaged your home and are unable to make the payments due to the loss of your job, insufficient funds, or any other reason, then you must be worried about foreclosure. You may be receiving grave phone calls or visits to your home by people from the mortgage company who offer information and advice about what you should do. This is bad and often detrimental to your credit score. You could very well lose your property without making a profit. Trying to ignore the problem or letting others make decisions for you is not a wise move. It is best to study all the options available and make a decision yourself.
There are quite a few options available. Bankruptcy must be your last option, as it drastically harms credit score ratings, and a bad credit score will adversely affect your chances of getting loans in the future and possibly jobs. There is however a temporary stay on the foreclosure process.
Outright Sale
If you have close family or friends who understand your situation, you can sell them the property if it is not a short sale. You could also either rent or lease the house. These days more and more people in South Florida who are unable to pay their huge mortgage payments are selling their homes to investors, as it is one of the best options available. You can lease your house through an investor and the investor repays the loan amount. If the value of your property is higher than the outstanding mortgage amount that you have to pay, you can sell the house to an investor. A willing investor will agree to make all your payments in exchange for the deed or title of your house.
You can read related reviews and visit various online sites to find reliable investors in your area and find the best one to sell your home. It is better than loosing it to a bank due to nonpayment. If the value of the property is more than the mortgage on it, you can later rent it or lease it. You can also sell your home in the open market. If the mortgage amount is less than the price of the property you can get a good price and repay your mortgage. If you do some renovation and repair anything that is broken, you should be able to sell it quickly.
Mortgage Refinance
Yet another option available to you when you have defaulted on a few of your payments is finding a lender to refinance your mortgage. With the refinance, you can work out a timely repayment plan so that you do not have to let loose your house; however, it could be tough finding a lender willing to refinance the mortgage.
Repayment Options
Loan modification is a very good option, but it entirely depends on your lender. A loss mitigation specialist can help with loan modification. A few possibilities under loan modification include a waiver of some payments, reduction in payments and working out short term repayment plans. This option allows you to stay in your home as you repay your mortgage to your lender. The lenders will take into account your income and your job while deciding on a loan modification plan.
A short term repayment plan is forbearance. Under this option, you can pay a reduced payment for a limited period. You get a short time to improve your financial condition. Although it does not solve any long term financial difficulties, the mortgage agreement is not changed and you get to live in your house. Lenders are wary of offering this plan to debtors who are regular defaulters.
Title/Deeds Strategies
Deed in lieu of foreclosure is a very popular option. You are not required to make the payments in exchange for the ownership of your property. Although it can reduce your credit score substantially, affect your chances of getting loans and credit cards and even jobs, you can avoid foreclosure.
A short sale is preferable to foreclosure. Under this plan, the lender releases his lien on the house for an amount that is less than the mortgage amount. The lender will inform the credit reporting agencies about the short sale agreement with the investor to reduce the negative impact the short sale can have on your credit report.
We are qualified consultants and professionals who can help you make the right decision and avoid foreclosure. Contact us to get our honest advice.