Many people felt the pain of losing their homes after the 2008 economic crisis. It is still a common occurrence in some areas, but the good news is that the statistics are less alarming as home values are increasing compared to the time of the recession. This is not comforting if your mortgage payments are higher than the value of your home.
Stay at Home
It is understandable why homeowners continue to pay their mortgages, even though it could take years for the property to be worth more than the amount you owe. Homeowners are concerned about their credit rating and whether they will default on payments or go into foreclosure. Many people feel guilty about debt because they know it must be paid back. It is often the best choice to protect your credit rating and living situation.
It is easy to become emotionally attached to a home that you grew up or raised your family in. Sometimes it can be difficult to let go of a home even though it is in your best interests.
Families can get assistance from the government to avoid foreclosure. If you are behind on your mortgage payments, the U.S. Department of Housing and Urban Development might have a program that can help. The eligibility requirements for these programs may vary, but HUD housing counseling agencies can help you navigate the right path regardless of your current situation. Start your search .
To determine if staying in your home is the best choice, it is a good idea to compare your monthly mortgage payment with the repair and tax costs. Looking to sell your house fast for cash? We beat the other guys’ offers click here.
Refinance the loan or modify it
Homeowners with a mortgage that exceeds the property’s value may be eligible for HARP (Home Affordable Renewal Program) refinance options. For borrowers with high loan-to-value ratios, HARP offers a simplified refinance option. This option is only available to homeowners who meet certain criteria, including current payments on their mortgages for the past 6 months and a source income. The Federal Housing Finance Agency reports that HARP refinances have surpassed 3.4 million since May 2016. The agency also stated that many borrowers are still eligible for the program and have not yet applied.
Homeowners can modify loans to lower their interest rate or pay less. Lenders might also be able to extend the term or let homeowners spread the missed payments across the entire loan. It is often difficult to get loan modifications through banks. The Home Affordable Modification program is one of the most popular loan modification options. This program is for homeowners with financial hardship. For those who are eligible, they could save up to $500 each month.
You can either rent or sell your home
Many people wish to avoid foreclosure. A foreclosure can cause a drop in credit scores of 85 to 105 points. A foreclosure can cause credit damage that lasts up to seven years. This will make it hard to purchase a home or finance any other transactions. It can be difficult to feel like you don’t have any other options when you are upside down on your mortgage. Before foreclosing on your home, there are many options. It should not be an option.
The rent to own option is popular among homeowners who are behind on their homes. They have the income to pay the mortgage, and they can use it to buy time. Rent to own allows homeowners who are unable to sell their home to rent it to people who can’t qualify for mortgages. The homeowner must become a landlord in order to rent their home. They also have to rely on another person for the monthly payments.
Enjoy a Short Sale
A house with a high loan to value ratio can be difficult for a seller. The homeowner can’t accept an offer for less than the mortgage amount because they have to pay the mortgage. Homeowners can sell their home for less than the value and then sign a new agreement. You would negotiate with the bank to agree on what they will accept. Banks lose money if you default with your loan. Many banks will allow short sales to avoid losses. Although a short sale can have a negative impact on your credit score, it is usually not as damaging as a foreclosure. When homeowners need to sell their house quickly , short sales are common.