Whether you are 1 week or 1 month late on your mortgage, this blog post will cover what you can do to save your home from foreclosure. When individuals fall behind on their mortgage it is typically from an outside factor. It could be the loss of a job, emergency surgery, unexpected expenses, or just a financially tough time. My goal in this blog is go over how to save your home when you have fallen behind on payments.
Help When Behind on Payments
Most financial institutions are willing to work with you, the property owner, to get you back on track with payments. They are in the business of lending money out, not owning real estate. The last thing Bank of America wants to do is file for Foreclosure & spend thousands of dollars taking the house back, and in the end sell it for a discount as an REO property.
The foreclosure process is extremely expensive for any financial institution. So, what other options do they have availible?
- Loan Modification
- Debt Foregiveness
- Government Subsidy
- Conventional Refinance
Loan Modification – is a change made to the terms of an existing loan by a lender. It may involve a reduction in the interest rate, an extension of the length of time for repayment, a different type of loan, or any combination of the three.
Debt Foregiveness – The bank may be willing to work with you to forgive your outstanding late fees or foreclosure fees if you agree to bring the mortgage back current.
Government Subsidy – For information on help that might be available contact a federal Housing and Urban Development office in your area, visit the agency’s website or contact a state social services office. HUD and other agencies offer mortgage payment grants to homeowners with hardships.
Conventional Refinance – Refinancing is done to allow a borrower to obtain a better interest term and rate. The first loan is paid off, allowing the second loan to be created, instead of simply making a new mortgage and throwing out the original mortgage.
Fell Behind on My Mortgage & Want to Sell The House
Now, in the scenario that you no longer want to own the house, or it is in such disrepair, there are several options. Generally speaking, you can still sell a home if you have missed a few payments on your mortgage. Your lender will just tack on late fees for this & note it in a mortgage payoff to the title company. But what are all your options as a home owner when looking to sell a house after falling behind?
- Conventional Real Estate Sale
- Short Sale
- As-Is Sale
- Subject Too Sale
Conventional Sale – This is a normal everyday transaction that happens when someone is looking to sell their home. Like I had mentioned before, you can still sell a house even if you have fallen behind on the mortgage. However, to sell it the conventional route you will want to make sure there is enough equity to be able to pay off the mortgage & pay for Realtor Fees.
Short Sale – A Short sale can be done when you owe more on your home than what it is worth. This is very common for houses that are bought in the height of the market & then drastically drop in value during a recession. Through the process of working directly with your bank we will figure out what price they are willing to accept for the property & we will buy it directly from you.
As-Is Sale: This is similar to a conventional sale, but works best for properties that need work. Here at CB Home Solutions we buy fixer upper properties so that is our speciality. With an as-is sale you do need equity in your home, however, you will not need to list the home with a Realtor or make any repairs as we can buy the property directly from you. This is by far one of the most convenient options for individuals no longer interested in owning a property.
Subject To Sale: In a subject to sale we would actually take over control of the mortgage on your property. We will bring the loan current & make the monthly payments for the remainder of the loan. This will allow us to acquire a property with great loan terms without having to go through the bank. The benefit to the homeowner is they will no longer need to worry about the property as we are responsible for the mortgage & the deed is in our companies name. In return this will restore the owners credit because of the on-time payments.
What Option Is Best For You?
I went over in detail all the options you have as a homeowner who fell behind on their mortgage. Now is time to decide what you want to do. Do you want to continue living in the property? Or do you want to get rid of it & never see it again? The choice is up to you & we are always here to help.