There are many reasons a homeowner can get behind with their mortgage payments. The bank will first send past-due notices, then intent-to-foreclose notices. Getting a foreclosure notice is not the end. As a homeowner, you have options to explore to get right or get out of your mortgage. With one option, you can have up to 12 months to move from your home!
Walking away may seem like the best solution, especially if it is a case where you owe more on your loan than your home is worth. There are options for what a homeowner can do, and they don’t all end in foreclosure.
Refinancing or modifying your existing mortgage is one of the first things to look into when you get behind on your mortgage. You can use this process to turn around a home loan that is headed to or in the early stages of foreclosure. Explore this option to see if it is the right solution for your situation. If your credit isn’t strong enough to qualify for a modification, there are other paths to take.
A short sale is an option many homeowners turn to when modifying the existing loan is not possible. This process involves finding a buyer and transferring ownership of the home to them. You will need to submit a hardship letter to your lender to approve the process. If the sale goes through, you will not owe on the property any longer. Additionally, you may qualify for up to $3,000 in relocation help from Fannie Mae.
Deed-in-Lieu or a mortgage release is another avenue you can use. This is the act of voluntarily transferring the title of the property back to homeowner. This is an option often used by homeowners who are upside down (owe more than their home is worth) and cannot qualify for loan modification. There is latitude with this option to remain in the home for three months (rent free) or even lease your house for 12 months to give yourself more time to transition out of the home. This option leaves the homeowner not owing a debt on the home after the mortgage release goes through. Much like the short sale process, homeowners that choose to use Deed-in-Lieu may be eligible for up to $3,000 in relocation funds.
Finally there is foreclosure. This should be the last option any homeowner considers as the consequences of having a foreclosure can last for years. Your property will be seized and sold at public auction. Plus the sale of the property doesn’t negate any first lien debt owed by the homeowner if the public sale does not cover the amount owing on the property. It can also render you unable to purchase another home for up to seven years.
As you can see, a foreclosure is not the only solution when you get behind on your mortgage. Find the outcome that is best for your individual situation.
If you’re not sure of what to do with your Jacksonville, NC home, contact our office for a free consultation at firstname.lastname@example.org. We’re ready to listen and help you.