Foreclosure vs Short Sale

Many Metro Detroit homeowners are experiencing financial difficulties and find themselves falling farther and farther behind on their mortgage. Michigan foreclosure rates are at an all-time high. Know that you are not alone. During this time, many do not know what actions they should take. For the non-mortgage savvy homeowner, knowing which direction to turn is difficult and often times very frustrating. First thing a homeowner who is having trouble making their mortgage payment should do is contact their lender. Do not wait until you are 2 or 3 months behind. Call as soon as it is apparent you will not be able to make your payment. If your situation is temporary, try asking for a 1 or 2 month forbearance. This means that 1 or 2 months worth of payments are added to the end of your loan bringing you current and stopping any foreclosure process. If you are facing a more long-term hardship, ask your lender for a loan modification. There are many options with loan modifications that you can request of your lender. It is not uncommon for lenders to convert Adjustable Rate Mortgages (ARMs) to fixed rates; reduce interest rates; give a few months forbearance; or grant a principal reduction if the value of your home is a great deal less than what you currently owe. Don't be afraid to ask. Once you have exhausted all these options and you were not successful dealing with your lender, you may be wondering "Should I Short Sale My Home"? There are advantages of short sales over foreclosure and any homeowner that is in this situation should know the difference and how each one will effect your credit score, employment and mortgage eligibility in the future. Time is of the essence. Don't procrastinate as this could be the difference between saving your home or walking away successfully.