What Are My Options When I Cannot Pay My Mortgage?

Help exclamationWhat Are My Options When I Cannot Pay My Mortgage?

First of all do not make the mistake of avoiding contact with your lender. You can find out what options your lender has for you and how they can help. There are programs that you may qualify for like a loan modification or a short refinance.

Do not hide the fact that you are in need of help by not talking to your friends and family about your situation, they may be able to help. There is no embarrassment, this is happening all over the U.S.

You can get what's called a "work out agreement" with the bank if you think your situation will improve  the bank will hold off on the foreclosure proceedings. You would still have to bring the payments up to date.

If your credit is still good you may be able to refinance with your bank and group all of your debt onto one lower interest rate loan. This will  help provided the amount of income you earn can pay for this new loan amount.

House spelled out EquityIf you have equity in your house, you may want to consider selling and buying a more affordable home.

If you do not have any equity in your home, you can sell it as a short sale. A short sale is when the bank is willing to accept less than what the mortgage amount is. This is something a homeowner cannot do on their own, the bank is going to want you to hire a Realtor to sell as a short sale.  A short sale may be the best option with the least amount of impact in getting back on track.

The bank may be willing to take a deed in lieu of foreclosure, in other words you leave your home and any equity there may or may not be...as far as the affect this has on your credit rating it is better than foreclosure. Most banks will not except a deed in lieu in a declining market.

wrong way signThe worst option is foreclosure, it has the worst impact on your credit and could prevent you from being able to buy a home for years to come. The bank could also be awarded a deficiency judgement which means you would owe the bank what it has lost through the foreclosure process.

Comment balloon 7 commentsGoran Utvic • May 02 2011 01:12PM

Comments

Good post! Being PRO-active rather than RE-active is the way to go.  It at least gives a person some control over a very hard situation.

Posted by Phil Hillerman, Crye-Leike Realtors® (Crye-Leike Realtors®) over 6 years ago

Thank you Phil, homeowner need to know that there are alternatives when facing foreclosure.

Posted by Goran Utvic, We Buy & Sell Chicago Houses Fast (606 Homes LLC | Chicagoland Brokers Inc, Chicago IL 60656) over 6 years ago

Great post! This should help homwowners with options than panic over the sitiation. Good job Goran

Posted by Will Nesbitt, Nesbitt Realty is a family-run brokerage. (Nesbitt Realty at Condo Alexandria) over 6 years ago

Will - Thanks. Homeowners should not panic there are options but some are time sensitive.

Posted by Goran Utvic, We Buy & Sell Chicago Houses Fast (606 Homes LLC | Chicagoland Brokers Inc, Chicago IL 60656) over 6 years ago

Goran ~ This is very helpful info for sellers who aren't sure of their options.  I hope business is good for you!

 

Posted by Maureen Bray Portland OR Home Stager ~ Room Solutions Staging, "Staging that Sells Portland Homes" (Room Solutions Staging, Portland OR) over 6 years ago

Thanks Maureen...paying the bills...hope bus. is good for you too.

Posted by Goran Utvic, We Buy & Sell Chicago Houses Fast (606 Homes LLC | Chicagoland Brokers Inc, Chicago IL 60656) over 6 years ago

Chicago Foreclosures - Chicago Real Estate Listings - Short Sale Opportunities homebuyers looking to buy in the Chicago real estate market can find excellent Chicago foreclosure deals here and information on how to sell a home with a short sale.

Posted by Goran Utvic, We Buy & Sell Chicago Houses Fast (606 Homes LLC | Chicagoland Brokers Inc, Chicago IL 60656) over 6 years ago

Participate