Are you behind on your mortgage? Do you owe more than the home is worth? Payments too high and you can’t refinance?
There are no easy answers for you, but some answers are going to be easier in the long run than others. I have experienced this tragedy myself and have learned quite a bit about the options that you have. This is my report on those options.
Once you are in this situation, for whatever reason, and there are many ways you can get here,
your credit is going to be affected. The only question is how much. If you do nothing and quit paying and go into foreclosure, you will not be able to buy a house with a bank loan for at least 5 years. In addition the foreclosure will stay on your credit report for 10 years, and you will always have to explain it even if you are past the 5 year mark. If you sell it for less than is owed, the bank or banks that you owe will not let it close unless you sign a form and set up a payment plan to pay them off over time. I wish someone had told me that is an option. You can declare bankruptcy, but this will only delay the inevitable, especially if you have a lot of credit card debt. Since the bankruptcy laws changed, it is not so easy to keep your house after one. All it does is buy you time, but it costs money too, and then you are back to where you started from. The only other option is to sell the house for what you can get and work out a settlement with your bank to accept that amount as payment in full, commonly referred to as a “short sale.” This will still impact your credit and your score, but it will not be nearly as bad as a foreclosure.
Many people think you have to have someone else manage your short sale for you and that the banks will not work with the owner, but that is not true. I have done it myself 4 times.
To start with, they will not consider this unless you are behind 60 days on your payment though, so that will be the start of your credit going down hill. If you are going to do this, don’t take out any new credit cards, and if you currently have checking and savings accounts at the bank your mortgage is held by, you will need to change them to another bank. For some reason banks don’t like to help their own depositors.
Beyond these things, there is a whole step by step process to do your own short sale that I explain in a special report called “Do Your Own Short Sale.” It is not really hard, and it will save you thousands of dollars vs. having an investor take over your deed and negotiate with the bank for you. Although they are performing a valuable service, there is no reason why you cannot do it yourself and save the money.
You do need to take action NOW though, so that your credit is not irreparably harmed. Just doing nothing will end up with your credit ruined and your house gone, with nothing for you to do but rent. Don’t let it happen to you! Save your credit so you can start over in a new home of your own.
Heather Burns is an author and internet businesswoman. Go see her business site at http://www.QuickNetProfits.com which has allowed her the freedom to work at home and write about various interests. She also has a blog about one of her favorite subjects, Angels, at http://angel-post.blogspot.com Her passions include her husband, her dogs, her websites, and helping others with their credit issues. Email her at Heather426@gmail.com
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Refinancing When You Owe More Than The Home Is Worth
There used to be more options and potential options if you needed to refinance while you’re upside down.
Exit Strategies for Upside Down Mortgages
My mortgage was upside down, and I was stuck in the loan.
Real Estate Blog – Upside Down with No Way Out.
They simply must wait it out and try and pay down their mortgage so they have the equity to move on. In the meantime, I will continue to try and find a better answer that suits the situation better.
Real Life Money and Credit – Upside Down on Your Home?
The H4H program allows homeowners to save their home.
Six options if you’re underwater on your mortgage
So feel free to be cruel. But just realize that being cruel says much more about you than it does about the people you are being cruel to!
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