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Avoid foreclosures
By Tazman | August 15, 2007
In today’s crazy real estate and mortgage market, some people are finding themselves in over their heads with their mortgages. Foreclosures have risen, but there are often other ways out of the mess. Here are some tips for any of you who find yourself feeling trapped.
If you’re behind on your mortgage, don’t automatically assume you’ll lose your house. Quick action might allow you to keep your property.
Raise funds: examine spending, get a second job, or downsize your car.
Contact your lender immediately. Lenders prefer a performing asset over a foreclosure, and may be willing to work with you. Consider discussing these options with your lender:
Forbearance. Lenders may let you make a lower or no payment temporarily-say for three to six months.
Repayment. If you’ve recovered from your crisis, lenders may allow you to pay more each month for a set period to make up missed payments.
Short refinancing. Under a short refinance, you refinance and the original lender accepts a payoff for less than you owe. Often the lender would lose more by foreclosing, so it’s worth the loss.
Short sale. You can sell the property and lenders may agree to accept less than you owe. This saves you from having a foreclosure on your credit record.
Before accepting any deal, consult with your accountant. Depending on the type of loan you have, you could owe income taxes on forgiven debt.
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Topics: real estate |
