Don’t give up, there is still hope
You’ve worked so hard to buy your home, and it is one of your biggest investments. You are proud of it, and it is a source of comfort and peace for you. But if you fall on hard times, and you are unable to keep up with your monthly mortgage payments, you may lose your home to foreclosure.
Before such a drastic thing happens, what can you do to avoid foreclosure?
If you are at the end of your rope financially, don’t give up. Consider your other options. Just think of how much more difficult it will be to get a new home when you credit rating is affected. It will definitely be affected if you let your lender foreclose your home.
If your monthly mortgages are piling up, here are some options for you to choose from:
- Consider a short sale. A foreclosure is a big deal to lenders because they will lose money, so when you are unable to make payments, the lender usually takes it to court. And if you happen to have a second mortgage or other loans secured by the home, you stand the chance of not just losing your home but your money as well.
When there is no way for you come up with the monthly mortgage, a short sale is a better option. Doing a short sale is beneficial for both you and the lender, and a far better alternative than foreclosure.
A short sale is when you sell the home for less than the outstanding mortgage on it, with the signed approval of the lender of course. In a short sale, your REALTOR® will work with the mortgage lender to get a deficiency waiver so that the balance can be forgiven. Your REALTOR® will also work with any other lenders so that their lien or claim can be removed.
One advantage of short sale over foreclosure is there will be no foreclosure stigma attached to your credit rating. Foreclosures appear on your credit report for seven years, and make it difficult to buy a new home, even if you have saved enough for a down payment and have already gotten a good job.
A short sale also appears on your credit record and lowers your credit score, but you will have get a shorter waiting period before you quality for a Fannie Mae or Fred Mac loan.
Another advantage of short sale is it allows a fresh start. With a foreclosure, only your mortgage payments are taken care of, but with a short sale, all your debts are negotiated by the real estate agent. The selling process will proceed like a normal real estate transaction, so if you chose not to tell your neighbors, they won’t even know the real reason why you’re selling your home.
- Talk to your lender about a loan modification. When you realize you are behind on your payments and you are not able to come up with a full amount to cover the outstanding monthly mortgage, you need to call your lender. Most lenders would rather negotiate a compromise which will help you catch up with your payments rather than foreclose on your home. A loan modification can give you a more affordable monthly mortgage payment, it’s less damaging to your credit rating, and best of all, lets you keep your home.
- Seek assistance from the government. There are several government programs to help you refinance your loan. You might consider getting help from the Making Home Affordable (MHA), or the Home Affordable Modification Program (HAMP). These programs seek to provide qualified homeowners a chance to reduce their monthly mortgage payment to a more affordable price.
- Opt for a mortgage forbearance agreement. If you are having difficulty with your monthly payments because of a temporary issue like unemployment or health problems, another good option is talking to your lender about a forbearance agreement.
A mortgage forbearance agreement is a temporary solution for borrowers. In this agreement, the lender agrees to reduce or suspend payments for a specific time frame, and not to initiate foreclosure. You as the borrower, promise to pay an additional amount to cover the monthly mortgage, including the principal, interest, taxes and insurance, once the agreed upon time period has elapsed.
Don’t allow your hard work to go to the lender. There are many ways you can avoid getting your home foreclosed on.
Whether you are looking for cheap homes Charlotte NC or just want to know more about Charlotte foreclosures and short sales, you can contact me for help. Call me, Nancy Braun, at (704) 997-3794. Let my skills and experience as one of the top REALTORS® of Charlotte help you sell your home.