Know your options!!

In our current economy......when speaking with home owners their most common question is..."What are my options"

So in answer to that question I am compiling a list of different options for anyone who is concerned about their home payments and what they could do if they lose their job or start to fall behind in their home payments. All of these options have an impact on your present day life and on your future; some have more impact than others. Each option could have a significant impact on your credit rating. Know your options before you make a move. In some cases you can try one option and if that doesn't work for you, you can move on to another option.

Choice - is the key. Look as the following options and the possible outcomes to that choice before you make any decision. You will feel much better if you make a choice rather than just letting something happen to you.

Do Nothing - You can always do nothing. If you don't seek other options and you let nature take its course. This is sure to push you into foreclosure. The stress this puts on you and your relationships are far worse than any other option you might choose.

Pay off mortgage - You can pay off the entire mortgage and solve all these problems; however this is not an option for most people.

Refinance -- Refinancing your existing loan may help lower your payments depending on how much you owe on the property, how much the property is worth, and your current credit rating. Your best option is to check out rates with a reputable mortgage broker/ or banker.

Rent the Property -- Renting the property may or may not be an option. If you are currently occupying your home this may not be suitable. However if this is a second home or an investment property renting the property out could be viable. Rental markets vary throughout the country, it's a good idea to check with a reputable property manager and determine if the monthly rent will be acceptable to cover your costs or most of your costs.

Forbearance - A forbearance plan will agree to allow you to pay less than what you owe for your mortgage payment temporally, and will sometimes let you postpone payments during a specific period of time. Typically the only way a lender will consider this, is if you can show that you have a future lump sum of cash coming in that will bring you current or qualify you for a loan modification at the end of that forbearance period. This could be a payment such as a tax refund, an inheritance, or a bonus.

Loan Modification - Loan modification is an option many people are considering. This process includes a written agreement with your lender that changes your loan agreement. Sometimes this can help make your payment more affordable by adding missed payments to your loan amount, changing an adjustable rate mortgage into a fixed rate, or even extending the number of years you can pay.

Loan modifications of the following sort are rare and often do not occur unless there are special circumstances. In some cases, a lender may be willing to lower your interest rate which in turn will help make your payments more affordable. Another rare occasion in loan modification is that sometimes they will forgive a part of the principal debt. The instances that these two options occur are rare and unlikely to occur in most common cases.

Repayment Plan - If you are behind in your mortgage, talk with your bank. A repayment plan may be an option for you. A repayment plan will give you a fixed amount of time to repay the default amount. Usually this is done by combining part of what you owe with your regular payment. If you complete all the payments as agreed, you'll be completely current at the end of the repayment plan.

Traditional Sale - If you are one of the lucky home owners that still contain equity in your property this option is for you. Selling your home and paying off the mortgage with the proceeds is definitely an ideal option. It's an option many people do not have. This however could help alleviate any mortgage pressure you have.

Short Sale - A large majority of homeowners feeling mortgage pressure will be giving this option a good look. If your mortgage balance outweighs your home's price in the current market, the only way to sell the property is through a Short Sale. A Real Estate Broker, expert in short sales, finds a Buyer for your property at Market Value and then negotiates with your lender to accept less than what you owe on the property.

Deed in Lieu - With this option you would voluntarily transfer ownership of the property to your lender to cancel your mortgage debt. There are usually some conditions with this option, and often they would require that you must have attempted to sell your home for its fair market value at least 90 days without success. However these options usually are not valid if you have other liens or a second mortgage on the property. Each Lender may have different requirements.

Bankruptcy - This does not save your home from Foreclosure; it will postpone it for a short period of time. There are significant ramifications for any of these options, If you are considering bankruptcy call an attorney that is expert in Bankruptcies. NOTE: There are different types of bankruptcy.

Foreclosure -- If you chose option number one above... "Do nothing"... You will usually arrive here sooner or later. Foreclosure happens when no agreement can be made with your bank and you are in default on your mortgage with them. The bank will issue a "Notice of Default" and take back your home, then sell it for fair market value according to the home's condition.

Some of these items you may have already been aware of and understand what is needed or what kind of obstacles you may face, however many of these items people may be unfamiliar with. Many may not understand what they "really" mean. If you want more information please call me Marcus Buchanan (707) 393-9120 or Maurine Grisso (707) 575-4444 and we will set up a consultation. Or contact me at www.maurinegrisso.com