For many of us we look forward to the American Dream…owning our own house. Unfortunately in the past year more Americans are discovering they are living more of a nightmare than the dream! Remember, Home ownership isn’t truly realized until you have made that final payment and your deed carries no liens. Only then do you truly OWN your house.
Until this wonderful day, the bank is the real owner and you must live by their rules. Their rules (guidelines) can in many instances seem unfair but you must note that you signed the dotted line and agreed to their terms when you got the loan.
OK so now what do you do if you find yourself falling behind. Don’t panic, you more than likely do have options! The most important thing you must do is contact the financial institution in which you have your loan through. Keep in mind; these banks are in the business of making money not owning Real Estate. They have just as much at stake in helping you find a solution and are more willing to help!
Here are a few quick options that may be available to you. I highly suggest you discuss these options but also ask if your financial lender has any other plans as well.
- Repayment Plan – Allows you to spread your delinquent payments over a period of time to allow you to bring your mortgage current. The lender will again work the terms as with the original loan.
- Loan Modification – This changes the interest rate and/or terms of your loan for a period of time and gives you a fresh start on managing your mortgage. I highly suggest that you use this option if you are on an adjustable and have been advised that your interest rate and subsequently your monthly payment will be increasing. Start this process BEFORE your loan changes.
- Short Sale – This option avoids foreclosure when you are unable to make your payments and allows you to sell your home and use the proceeds to pay off your mortgage. In some instances you may have to still pay the difference between the sale of the house and your mortgage. This still might be a better option than the foreclosure on your credit.
- Deed in Lieu of Foreclosure – Allows you to transfer your property voluntarily back to your financial lender if you are unable to maintain your payments, or sell your home. This usually requires your house to hold a higher value than the amount you owe.
These are a few options but certainly many more might be available to you. All you have to do is ask! As with any financial / business decision communication is critical.
See the light and become brighter everyday!