Is Your Mortgage Out of Balance with Your Budget?
An unexpected illness in the family, an expensive car repair, almost any emergency can quickly cause you to feel that your finances are out of balance with the life you’ve worked so hard to build.
The housing crisis has affected people of virtually every income level, every region and every education level. Consider these facts:
- Number of consecutive years home prices have fallen: 5
Number of homes lost to foreclosure since 2007: 7.9 million
In 2011, 1.9 million homes were foreclosed upon, which is actually the lowest number of foreclosures since 2007.
What are Your Options?
Foreclosure is the final step in a delinquency proceeding, and far too many homeowners don’t reach out for help to stop the process. Foreclosure carries many long-term consequences, apart from losing one’s home. The good news is foreclosure seldom needs to happen, given all the alternatives available today. Here are just a few:
- Reinstatement: If your financial setback was temporary, you can make a one-time payment which includes all missed payments, legal fees and late fees, and you can be eligible to be reinstated.
- Forbearance or Repayment Plan: If your hardship was temporary, but you cannot afford reinstatement, you may be able to negotiate a forbearance or repayment plan, which will allow you to pay the missed payments over time, or the payments can be placed at the end of the loan term.
- Sell the Property: If you have equity sufficient to pay off the mortgage, this is always an option.
- Mortgage Modification: You may be eligible to modify your existing loan, resulting in lower payments. Programs vary from bank to bank.
- Refinance: You may be eligible to obtain a new loan at a lower interest rate in order to reduce your monthly payments. Your creditworthiness, value of your home, and whether or not you are current on your payments will determine whether this is an option for you.
- Bankruptcy: In some cases, bankruptcy is an option. It may stop foreclosure and allow you to reorganize your debt. This is a temporary delay, and also makes the property much more difficult to sell.
- Short Sale: You sell your property for less than required to pay off the existing loans, and the bank agrees to accept the net proceeds and release the lien. In some cases, you will also be released from the liability of the loan.
All options should be thoroughly investigated for legal and tax consequences with your attorney and CPA.
One of the Most Important Things to Know
The sooner help is sought, the more options are available, and the greater chance of success.
As a real estate professional who has earned the Certified Distressed Property Expert (CDPE) designation, my mission is to provide financially strapped homeowners with alternatives to foreclosure, help them steer clear of scams, and assist them in finding the solution that best meets their needs.
These are tough times, but more help is available than ever before. If you or someone you care about needs help to realign the balance of your financial life and tip the scales back in your favor, contact me today and let’s get started.