Slipping toward foreclosure can lead to feelings of anxiety, depression, and loss of self-esteem. Don’t give up. There are options available to help millions of homeowners rescue themselves from the brink. Since it is crucial to act before a foreclosure takes place, now is the most important time for you to review the following options and solutions. As a Certified Distressed Property Expert (CDPE), I am trained in assessing all foreclosure alternatives and pursuing the best solution for your own financial situation.
1. Short Sale
A short sale allows the homeowner to avoid foreclosure, minimize financial damage and move on from a burdensome, unaffordable mortgage. In many cases, a short sale allows the borrower to qualify for a new mortgage in just 24 months, as opposed to five years or more after a foreclosure. A trained real estate agent can negotiate a short sale with your lender if you have three qualifications:
First, you must show some type of financial hardship. Second, you must have a monthly shortfall, meaning your monthly expenses are greater than your monthly income. Finally, you need to prove that your debts are greater than the value of your assets (certain investments, property, etc.).
A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult for homeowners to achieve. The homeowner simply pays the total
amount past due (including late fees) to the lender. This solution does not require the lender’s approval and will “reinstate” a mortgage up to the day before the
3. Forbearance or Repayment Plan
A forbearance or repayment plan involves negotiating with the mortgage company to allow the homeowner to repay back-payments over a period of time.
The homeowner typically makes current mortgage payments in addition to a portion of the back-payments owed. This option requires lender approval.
4. Mortgage Modification
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These changes require lender approval and typically result in a lower payment for the homeowner and a more affordable mortgage.
5. Rent the Property
This option does not require lender approval, but does require the homeowner’s ability to rent the house for enough money to cover the monthly mortgage payment. It is important to remember that there may be unexpected costs associated with the maintenance of a rental property in addition to the monthly
mortgage payments. Homeowners should take this into consideration when deciding whether this option will work for them.
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Phone: (805) 234 7890