About to lose your home?
If you are late with your mortgage you are not alone.
According to the Council of Mortgage Lenders there were 125,100 households in arrears by the end of June 2007.
A lot of people refinanced their mortgage to an adjustable when the rates were low, but now that their adjustable rate is about to jump, and with the housing market softening, it’s a huge problem for thousands of homeowners who can no longer afford their mortgages, some are afraid that they are going to lose their house.
So what can you do if you get behind with your mortgage payments? There are options.
First of all, call your lender as soon as you foresee a problem.
The worst thing is to ignore everything that is going on, no one wants to lose their home. Just hoping and praying for a miracle will not work without some action on your part…the notices will begin to appear.
Depending on your circumstances, you may be able to arrange an alternative repayment plan with your lender. Banks don’t want to foreclose, they are in the money business and holding vacant properties is not what they want.
Some homeowners have turned to a idea known as ˜sell and rent back. The idea is that you sell your property to a company that lets you stay on as a tenant so you don’t lose your home.
Beware! Some of these companies take advantage of you when you are at your most vulnerable. Some people have practically given away their homes. Selling and renting back should be your last option. So make sure it’s just your mortgage you lose, not your home as well.
If you are late on your mortgage payments seek advice immediately. The problem will probably get worse. It’s tough to get back on track, but it can be done. Contact your lender, sort out an arrangement with them and stick to it.
You could put your house on the market. Most lenders will allow you a certain amount of time to find a buyer, so that your arrears are paid off by the sale.
You can find out how much your home is worth and look into remortgaging or taking out a secured loan. Think carefully about this option as it may not be affordable in the long run.
If you discover it isn’t worth as much as you owe, ask your lender about what they call a short sale. That’s when the lender agrees to accept less than what you owe.
If the lender gets paid and they’re able to deal with it and you are able to walk away with a fresh start, it works out for everyone. The downside to a short sale it that it could stay on your credit report for seven years. And you may have to report the unpaid balance as income to the IRS, but at least its not a foreclosure mark on your credit history.
Daisy Says: Seeking solutions starts with looking at options.