Facing Missed House Payments? - What are your options?

Short Sales and Foreclosures seem to be everywhere right now and finding success with them can be quite a challenge. When considering your financial situation and the possibility of missing payments, it is best to get help early. The longer you wait the more difficult it is to find a solution.

At West Valley Home Team, we do all we can to help people stay in their home. In reality, homeowners have the following options when faced with financial difficulties involving house payments:

Option 1 - Refinance - always consider a refinance first

          Benefits: Current interest rates on a 30 year fixed rate mortgage are averaging around 5%-5.25%

          Drawbacks: Your home must appraise at a certain value and we are finding sometimes the current loan amount is greater than the home value, which will make it impossible to refinance unless you bring money to the table.

Option 2 - Loan Modification - take your current loan and adjust (modify) the terms

           Benefits: Stay in the home with little or no harm to your credit score. There are a number of ways to modify a loan, depending on your lender.

           Drawbacks: Loan Modification can be time-consuming and stressful as banks can be challenging to negotiate with. Sometimes lenders will modify the loan for a short time period, then it resets. Be wary of companies that charge a fee up-front for loan modification.

** We work with a third party to do loan modifications with NO up-front fees and do everything possible to wrap the loan modification fee into the modified loan amount so there are no out-of-pocket expenses.

 

Option 3 - Short Sale - sell the house with underlying lien holders approval to forgive a portion of what is owed.

           Benefits: Reduce the harm to your credit score. Avoid foreclosure.

          Drawbacks: You must move to a new location. Negative affect on credit.

I came across this article called Success with Short Sales at Realty Times.

** When the first two options are not available to clients, we then provide the option of a short sale.

Option 4 - Bankruptcy - file bankruptcy (talk with a bankruptcy attorney about benefits/drawbacks for you)

Option 5 - Foreclosure - bank "takes back" the home and attempts to sell at auction. If no sale at auction, it typically goes on the market as an REO (real estate owned) property. Bank owned.

 

At West Valley Home Team, we do all we can to help home owners avoid the last two options. We are finding more and more people are heading into difficulty with their mortgage payments due to ARMs resetting, job loss, medical situations, divorce, etc.

Once again the key is to get help early! Contact us for more information about how you can get help.

If you have other ideas that could help home owners, please submit your comments. The more homes we can save the better for everyone.