When facing Foreclosure you must have
CASH or HOME EQUITY or EXPERIENCED REALTOR
1. Do Nothing - If a Homeowner does nothing, you will lose your home at a foreclosure sale. Your credit will be further damaged. Loan Applications typically ask if the applicant have had previous foreclosures. Not the Best Option!
2. Payoff/Refinance - Completely paying off the entire loan amount plus any default amount and fees. Usually this is accomplished though a refinance of the debt. New debt is at a normally higher interest rate and there may be prepayment penalty because of the recent default. With this option, you’ll need to have equity built up in the home.
3. Reinstatement - Paying the entire default amount plus interest, attorney fees, taxes, missed payments and fees. This option you’ll need Cash.
4. Loan Modification - Utilizing the existing mortgage company to refinance the debt or extend the terms of the loan. This may allow the homeowner to catch up at a more affordable level. To qualify, you must prove to the lender you have fixed the problem that caused the late payment. Your credit will be further damaged.
5. Forbearance - Lender may be able to arrange a repayment plan based on the homeowner's financial situation. The lender may even be able to provide a temporary payment reduction or suspension of payments. Information will be required from the lender to show that you are able to meet the new payment plan requirements. Your credit will be further damaged.
6. Partial Claim - A loan from the lender for second loan to include back payments, costs and fees. With this option, you may need to have equity built up in the home.
7. Deed in Lieu of Foreclosure - Give the property back to the bank instead of the bank foreclosing. Banks generally require the home be well maintained, all mortgage payment and taxes must be current. Most loan applications ask if this has ever happened. Your credit will be further damaged.
8. Bankruptcy - This option can liquidate debt and/or allow more time. You will need a qualified bankruptcy attorney. This option you’ll need Cash for attorneys fees.
9. Home Sale - If the property has equity, the homeowner may sell the home without lender approval through a conventional home sale. In this case, the homeowner will get cash from the sale.
10. Short Sale - Also known as a pre-foreclosure sale. An experienced Real Estate Professional can negotiate with your lender to sell the home if what is owed is MORE than the property's value. This avoids foreclosure. An experienced Real Estate professional can assist you in relocating to a more affordable home. This option can limit your damaged credit history and requires little cash out of pocket. REALTORS® with the SFR certification can be a trusted resource for short sales and foreclosures.
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