Unfortunately, there are so many people that feel as though they do not want their house anymore. They just want to let it go into foreclosure and the bank can have it. This is a TERRIBLE option. Just giving up on paying your mortgage is not a good option.
There are so many options out there is you are struggling with paying your mortgage:
1. Loan Modification
I have written many blog posts about loan modifications and there is a ton of information out there about them. This is an option for you whether or not you are qualified under the MHA. Most banks have their own internal loan modification program, if you do not qualify for the MHA.
2. Refinance
Qualifying for a refinance is your biggest obstacle here. If your house has some equity in it, you want to talk to a licensed mortgage broker or your bank about the possibility of refinancing. Refinancing does have costs associated with it; however, with interest rates as low as they are, the costs may be worth it. You will also need to have a good credit score (620 or higher).
3. Streamlined Refinance
A Streamlined Refinance is a refinance of your existing loan with the same lender and the costs are significantly lower than in a traditional refinance.
4. Deed-in-Lieu of Foreclosure
If you are already behind on your mortgage, a deed-in-lieu of foreclosure may be an option. Under this option, you will need to contact your bank and determine if they are willing to take back the house. You will turn over the deed back to them. The banks are sometimes willing to do this to avoid the foreclosure process and the fees that are associated with it. There is some negotiating that will have to be done here. You want to make sure that the bank releases you from the mortgage and any deficiencies. You do not want to turn your house back over to the bank to then find out that you still owe the balance of the mortgage.
5. Short Sale
A Short Sale is where you sell your house for less than you owe on it, pending approval of the bank. You will need an attorney to negotiate the short sale for you but here, there is also the opportunity to make sure that you do not owe anything to the bank. Your attorney should be able to help you negotiate this and make sure that any deficiencies in the sale price and mortgage amount are “wiped” away.
6. Cash for Keys
Some banks are now offering a program called “Cash For Keys.” This is a program where the bank pays you to move out of your home. You are released from the mortgage and most of the time, any deficiencies between what you owe on the mortgage and what the bank sells the house for. Once again, all terms of this need to be negotiated before it is finalized.
There are so many options if you are in danger of losing your home. Don’t just walk away. There are scams out there so you need to be careful, but you do have options.
Related Posts
1. Should I Stop Paying My Mortgage?
2. Streamlined Refinance As An Alternative to A Loan Modification
In this Real Estate market, we get asked a lot, “Should I rent a home or buy a home?” While I believe that this a personal decision, there are definitely pros and cons of owning a home. For many people, there is a personal satisfaction in owning a home. However, the financial burden of owning a home can be too much for many people. Renting a home is many times a better decision, both financially and emotionally.
Recently there was an article on