Selling, Refinancing and Foreclosure
June 28, 2009 by Admin
Filed under Stop Foreclosure Options, Stop Foreclsoure General
With lots of people unemployed right now, many homeowners cannot keep paying their mortgage payments. Some of them have low rates but, without jobs, they still cannot pay them. Some homeowners are worse off and have adjustable rate mortgages and find their home payments adjust to more than they can afford. Many homeowners cannot afford to stay in their current homes so they should sell and move on. However, with real estate prices falling sharply, they also find themselves with upside down mortgages. That means, they owe the banks more than their homes are worth. So, what can they do?
Is Selling the Homes an Option?
The first thing that comes to mind for a lot of homeowners is to sell and move on. But, if they were to sell their homes, they are likely to get less for them than what they owe the banks. Therefore, selling might not be the best option. However, it is usually a good idea to consult a real estate professional to make absolutely certain that there is no way to sell and walk away free and clear without having to come up with the rest of the money for the mortgage balance later on.
Choosing to Refinance
Often when you owe more than your home is worth, mortgage companies will not lend. However, there might be options that allow you to refinance your home or modify your loan since the rates are historically low right now. If your credit is good and you wonder if refinancing is right for you or have any home loan questions, call your mortgage company as well as other lenders for comparison. Sometimes, your own mortgage company may not be able to help you but other banks may be able to.
Debt Relief After Foreclosure
Many homeowners cannot sell their homes, cannot refinance and cannot modify their loans. Soon their mortgage companies try to foreclose on them. Foreclosure severely hurt your credit so you should call your bank and try to negotiate with them before they foreclose. If they do foreclose, however, there is the new Mortgage Forgiveness Debt Relief Act of 2007 that will work on your side. This Act allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.
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