Many families in financial distress wait until it’s too late to get help. To save your home or maintain some level of credit after a financial crisis ends, read below. Don’t put off getting the help that you need.
Things to do if you are a homeowner in financial distress –
CONSULT WITH A REALTOR BEFORE IT’S TOO LATE –
o Make sure you have a well-trained Realtor Certified Distressed Property Expert (CDPE). We have several agents with this important designation at Register Real Estate Advisors (RREA).
o The company needs to offer good marketing to sell the property fast before you get foreclosed on.
• Use a Realtor that will showcase your home in a magazine ad
• Find a company that has a large online web footprint
• Direct mailings help advertise the home
• Social media is a way to get your home in front of more people
• Videos will showcase the house and adding it to blogs will give it more exposure.
CONSULT WITH YOUR ACCOUNTANT –
o With a short sale, homeowners pay income tax on the bank’s loss
o Find out if you can reorganize your assets to stay in the home?
o Is bankruptcy an option for you where you can keep the home?
TALK TO YOUR MORTGAGE LENDER ABOUT OPTIONS –
o Can you do a loan modification?
o Are you eligible for a short sale?
o Will they allow a temporary forbearance?
o Get a second job/rent a room
o How can you save your home? Once you are behind it is hard to catch up because of late fees and penalties.
At what point do you preserve your capital and move on? That is a difficult question to answer and a moral questions that comes into play when you are behind on your mortgage. You will need answers to the questions above to help you decide what to do next. You need to consult with people who can help you in your particular situation.
Did you know there are some lenders that have not foreclosed on borrowers that are 13 months behind on their mortgage and still occupying the home. There are other lenders that foreclose when owners are two months behind. If you can live there without paying the mortgage and save some capital, maybe you should. There is no right or wrong answer to this…but it is somewhat of a moral issue to answer.
Whatever you do, you’re going to need some money after your short sale or foreclosure so that you can move on. You won’t be able to buy another home for two years or more. It’s difficult to rent a home after going through this process. You may have to move in with family or friends. If you really want or need to purchase another home, your best option is probably going to be seller financing. You’ll need to put down a large down payment and will probably have a high interest rate because you are a risky buyer, but it might get you into your next home.
If you need help or advice with a short sale or foreclosure please give me a call at 281.288.3500. I am a CDPE Realtor and would love to help you with your real estate needs.
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