Underwater In Your Mortgage: Don't drown!
By: Elaine VonCannon ABR, SRES, REALTOR, Notary, Team Leader, Residential and Commercial Property Manager, Managing Partner VonCannon-Starke Commercial Division, Member of the National Association of Residential Property Managers, Award Winning Agent, RE/MAX Hall of Fame, Licensed in Virginia, Member of Commercial Council VAR, Director WAAR MLS Board
Jeff Hurd, Senior Loan Officer with Prime Lending
If you have ever been swimming, you know what it is like to be underwater. If you are scuba diving you have air for a limited amount of time. If you are snorkeling – you have air for an even more limited amount of time and if you are simply holding your breath, you know that time is running out very quick and you need to get back to the surface before your drown.
If you have been or are underwater on your home (you owe more than what you could sell your house for at a specific moment) then you will have that same feeling of being underwater. What are your options? What can you do to either get more air or get back to the surface? To answer those questions you have to ask yourself one very important question first: Do I want to keep my house or do I NOT want to keep my house. That’s it. Ask yourself that one simple question – forget about everything else—do you want to keep your house or do you not? If the answer is yes - then here are the next steps.
What kind of loan do you have now and what is the interest rate? It is very possible that if your loan is VA, FHA or Conventional, there may be a way to LOWER your current mortgage rate EVEN IF YOU OWE MORE than what you could sell your house for.
Ask an experienced loan officer about the Streamline Loan (home assistance program, loan modification) which was enacted June 25, 2012. A qualified experienced loan officer, can help you with this process.
If you are presently above 4.75% - this may be a very strong option as many 30 year fixed rates are currently below 4% - you may be able to save enough per month to be able to BREATH easier- thus getting you the air you need in order to buy time to still live in and enjoy your house without the same feeling of drowning.
A qualified experienced loan officer can determine IF your refinance is feasible and how much it will save you now and in the long run. A qualified loan officer can also determine if you cannot be approved and most importantly, WHY you cannot.
If that is the case, you can pursue options with your current mortgage servicer (that’s the name that comes on the monthly Mortgage billing statement). Those other options include modification amongst other things. Please, keep in mind, that if your current financial situation is one in which you can afford the payments but are just frustrated at being underwater and would like to live somewhere else—you may be able to qualify to buy a new home with having the contingency of selling your current home.
This is especially the case for Veterans, but it is not exclusively limited to veterans. In many cases you can rent out your current home and allow time to pass to where you are no longer underwater and call sell down the road for a profit rather than take a loss now.
If the answer to that one simple question earlier is I do NOT want to keep my house - then the most important thing to do is get help in trying to sell your home right away. By selling your house, upside down, it may constitute what is known as a short sale. A short sale is simply where the bank that has a lien on your home agrees to release that lien for less than what is owed. In today’s environment, it has become more and more popular. If you can manage to do a short sale and do it without falling behind your payments then you can put yourself in a good position to buy a new home in very short order.
Another option you may have is a Deed-In Lieu of Foreclosure. I have written a blog on this subject, which is on my blog site and my web site. Please, Take time to read this as it is another useful tool you may use to help you in the up side down position you may find yourself in with this current market.
Banks are becoming better equipped to helping consumers in this situation, but still have a ways to go. Be patient, be smart and above all else make sure that your team is there to help you though this. It is hard work to tread water, think of your Realtor and your Loan officer as your professional life guards”
Visit my web sites to view other listings at www.voncannonrealestate.com www.estatesinvirginia.com You will also find articles, my radio shows and TV appearance and more information on homes, the Virginia real estate market and my team.
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