If you find yourself facing foreclosure, you are not alone. Many homeowners find themselves struggling to make their mortgage payment and often times default on their loan. Once this happens, your lender is forced to recoup their investment by finding a new owner for your property.
There are many ways to avoid foreclosure, even in times of hardship. With programs designed to help owners keep their home and/or minimize damage to their credit, Fannie Mae, Freddie Mac, HUD and the VA can help you through this difficult time. Through these programs, experts will help to determine if you are able to afford to keep your home and if recovery from your financial setback is possible. These experts will also help you get a better grasp on your situation and options.
Santa Barbara Realtor Timm Delaney has compiled a list of the most frequently asked questions regarding stopping the foreclosure process. For more information, contact Santa Barbara Real Estate Expert Timm Delaney at Timm@TimmDelaney.com or (805)895-1109.
Should I keep my home or sell it?
Most experts agree that you should be able to keep you property if your monthly payment is less than 40 percent of your gross monthly income. You may need to consider selling or transferring the property if your payment exceeds 40 percent of your gross monthly income. No matter what you choose, keep in mind that your goal is to minimize the damage to your credit while recouping as much equity as possible.
Will my lender be willing to work with me to avoid foreclosure?
Believe it or not, most lenders want to avoid foreclosure at all costs. Most experts encourage homeowners to contact their lender as the first step in the process. You will find that most lenders are willing to work with you to repay your defaulted amount over a period of time.
Is refinancing an option if my loan is in default?
If you have more than 30 percent equity in your home, chances are that you could refinance your property in order to bring your loan current. You will most likely have higher interest rates and fees since your loan is in default, but it may save your property from entering foreclosure.
Should I consider bankruptcy?
Bankruptcy is a major step that will impact your credit for many years. Bankruptcy merely puts foreclosure on hold, it does NOT STOP it. Most experts recommend that you seek legal advice before you consider taking the drastic step of claiming bankruptcy.