Cannot Afford Mortgage?

The real estate and credit collapse of 2008 has sky rocketted bankruptcy filings and foreclosure rates like never before in history.  Foreclosure rates has hit a historical high in late 2011 and many Americans have still not recovered by the Great Depression of 2008.  Although unemployment rates have dropped, statistics show that the unemployment rates is in the double digits and the numbers being reported are not actual figures due to millions who have just given up in trying to find employment.  Many homeowners are still lingering in keeping their home mortgage payments afloat and foreclosure rates are no where in sight in tapering off.   According to a recent study by Realty Trac, foreclosure rates in many states are experiencing increases month after month since August 2012 and the foreclosure rates does not seem to stabilize.   If you cannot your mortgage and do not see any light at the end of the tunnel, there are options that you might want to consider.

Options If You Cannot Afford Mortgage Payments

If you cannot afford mortgage payments and need some relief, there are some alternatives and options for you to consider.  There are many reasons why homeowners cannot afford mortgage payments.  It can be due to a job loss or business shutdown.  It can be due to medical reasons or a nasty divorce.  Whatever the reason, the first step you should take is to contact your mortgage lender.  There are alternatives to foreclosure and your mortgage lender will be your best ally in helping you either keep your home through a repayment plan or a deed in lieu of foreclosure or short sale.  The best time to contact your current lender is while you are still current with your mortgage loan payment.  Do not blatantly not pay your mortgage loan payments without contacting your mortgage lender.  Your mortgage lender does not want your house and do not want to foreclose on you unless absolutely necessary.

Refinancing To Lower Your Monthly Payments

Refinancing so you can lower your monthly mortgage payments may be an option.  I can now offer a FHA Streamline with no income verification and no credit scores required for FHA mortgage loan borrowers in Illinois, Florida, Wisconsin, California, and Indiana.  As long as you are employed, the mortgage lender will not verify your income and you can have bad credit and recent late payments but not on your mortgage.  The only requirement is that you are not late on your mortgage payments.  If you have recently got the FHA mortgage loan and you got your hours greatly reduced and need to lower your payment, you can do a FHA refinance loan with no income verification.  There is a minimum six month seasoning requirement for you to have a FHA Streamline Refinance if you recently purchased your home.  There are FHA adjustable mortgage rates loan program that mortgage rates are substantially lower than the 30 year fixed rate mortgage rates.

Loan Modification: Alternative If You Cannot Afford Mortgage

Another option if cannot afford mortgage payments is to request your current mortgage lender if you qualify for a loan modification.  A loan modification is when your current mortgage loan gets restructured to make the monthly mortgage payments much more affordable.  The mortgage payments that are in arrears can be added to the back of the loan, the terms can be extended, the mortgage rates can be reduced, and the mortgage balance can be discounted if the home is severely under water.

Selling Your Home Regular Way Or Via Short Sale

Another alternative if you cannot afford mortgage payments on your house is to consult with a realtor and see what your home is worth.  You may be surprised on how much your home is worth.  Real estate prices have been increasing since the Great Recession of 2008 and you might have more equity than you think you have.  If your home is worth more than your mortgage and you have substantial equity where it will cover your closing costs and still have equity, you might want to list your home with a realtor.  If your home is worth less than your mortgage balance, then you might want to do a short sale which requires the approval of your current mortgage lender.  A short sale is when you sell a home below the balance of what you owe to the mortgage lender.  Mortgage lenders are always willing to entertain a short sale offer because it saves them a lot of time, money, and grief over a regular foreclosure.  If your home needs tons of repairs and may take a lot of time in selling it, you might consider doing a deed in lieu of foreclosure where you turn in your home in return of the mortgage lender foreclosing on your home and having the courts issue a deficiency judgment.

Reorganize Your Debt By Filing Bankruptcy

If you had a salary decrease due to changing jobs or company budget cuts and that has impacted your income where you have too much debts which is impacting paying your mortgage payments, you may want to consider filing bankruptcy.  I am not a bankruptcy attorney nor am I qualified to offer bankruptcy advice, but you can file Chapter 7 bankruptcy and wipe out all your debts and still keep your home if you have little or no equity in your home.  If you have tons of equity in your home and assests  and have income, you may want to think about filing a Chapter 13 bankruptcy where it is a restructuring of your debts over a period of time.  The best thing to do is to consult a bankruptcy attorney to weigh your options.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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