Short refinancing is the key to saving money and reducing your payment. Mortgage companies are looking to invite customers into the arena of refinancing by taking their loans and recalculating them with a smaller interest rate and reducing the customers monthly payment.
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I am in pre-foreclosure process and need advice!!!Refinance, Buy, sell, mortgage, real estate expert needed!?
Me and my boyfriend recently moved in together, but this forclosure crisis has caught up. We were wondering whether we should sell, refinance or file for bankruptcy?
I AM IN PRE-FORECLOSURE PROCESS AND NEED ADVICE!!!-REFINANCE, BUY, SELL, MORTGAGE.
When facing foreclosure, most homeowners have multiple options. I will try to go through each one.
1.) First Option: Asks for Friends & Family for Loan
No one likes to ask for money. Especially if we think we can “handle it before the foreclosure date”.
Banks do NOT like taking back properties. They too are dealing with loss in property value. Bank own properties also known as REO take too much of the banks resources. Your bank will normally be more than happy to accept simple deposit or percentage of the money owed to reinstate your mortgage. You can requests these funds from friends and family with a repayment term that is comfortable for you. It is important to read and contact your bank about the possibilities of being reinstated.
2) Request Special Forbearance: Your lender may be able to work with you in a repayment plan based on your financial situation and may even provide for a temporary reduction or suspension of your payments. You may qualify for this if you have recently experienced a reduction in income or an increase in living expenses.
3) Partial Claim. Your lender may be able to work with you to obtain a one-time payment from the FHA-Insurance fund to bring your mortgage current.
You may ask your lender if they offer this service and if you qualify.
4) Refinance: Refinancing your property is an alternative many homeowners have used to prevent their foreclosure. By refinancing their property, they can reduce their mortgage to a more suitable or doable monthly payment. Be weary of mortgage firms that promise rates that seem too good. “Everything that glitters is not gold”.
5) Quickly Sale: Depending on the time you have before your foreclosure date, you can either hire a real estate agent in your local area or quickly sale to a real estate investor interested in your property.
6) File for Bankruptcy: Not the most favorable option. You must find a local attorney to assist you with bankruptcy as the laws for foreclosure prevention varies in all states.
A great source to find real estate agents whom would like to help you sell, investors whom would like to purchase properties, refinance agents to help you refinance, and bankruptcy assistance would be http://www.homeleafs.com.
Wow! I just answered a question like this!!!
References :
http://www.homeleafs.com
http://www.hud.gov/foreclosure/index.cfm
Something that could be another option is negotiating your priniciple with the bank. They would rather drop the principle a little but and refinance your loan at that new principle than have you foreclose or walk away from the house.. I'm starting more and more people do this where I live…
Given the choices above, I would refi if at all possible
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In order of preference you should 1)sell 2)refinance and finally 3) declare bankruptcy. The first one is the best because you obviously can not afford the home otherwise you would not be where you are at. Refinancing will probably place you in the same position you are now just at a later date and a lender will see that coming and deny your application. Bankruptcy? You don't want to go there.
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sale if you can
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The list of various methods to stop foreclosure that is presented below is a nearly comprehensive accounting of the most common ways homeowners can use to save their homes, either by staying in them and avoiding foreclosure, or by getting out of a bad situation with as much of their financial lives intact as possible. There are really no magical ways to end the foreclosure process — but there are enough tools that homeowners have available, that they can choose from a number of options to help them out of their hardship situations.
1. Save up and get current on the mortgage by paying back the payments you've missed, plus the interest, late fees, attorney fees, etc. Understand that there are often thousands of dollars of extra charges that are added once you start missing payments and especially if the lender hires a law firm to pursue the foreclosure.
2. Work with the lender to put together a repayment plan, which would require you to put down part of the amount you are behind now and pay back the rest over a period of months, along with you current monthly payment. Usually, repayment plans can be worked out through your lender's loss mitigation department, and will result in you paying almost twice as much per month as your regular mortgage payment. This is to help you get caught up on the payments you missed while you are paying your original monthly obligation.
3. Work with the lender to modify the terms of the loan to say that the missed payments are spread out over the life of the loan or put on the back end of the loan. This is called a mortgage modification or loan modification. Some lenders will not do this because they do not hold the paper to be able to modify it. This is especially true for mortgage servicing companies, who only service their loans and collect payments, but who do not own the loans.
4. Refinance — find a hard money lender or traditional lender that will consider foreclosure refinance loans. Qualifications include lots of equity and lots of income, since your interest rate will probably be over 10%. Foreclosure refinance loans can be difficult to qualify for and may result in higher monthly payments, but they are a good way for homeowners to get a fresh start with a new note and new lender.
5. If you have an FHA loan, you can get a one-time loan from the FHA that will bring you current and is placed as a lien on the property that you would have to pay back if you sell or refinance the home. This is called a partial claim. You would have to contact the FHA directly for this one time payout to get you caught back up on your mortgage.
6. Sell to a private investor or friend/family member and lease/rent the property back from them. That clears off the foreclosure loan on the property and uses someone else's good credit to get a new loan and allows you to stay in the property. Investors can also work out short sales on properties, allow they usually do this in the hope of flipping the property by reselling it quickly at a profit.
7. Bankruptcy will stop the foreclosure process, but is usually an expensive alternative to setting up a repayment plan, mentioned above. Attorney fees, trustee fees, court costs, and high monthly payments cause a lot of people to fail their bankruptcies. Only consider bankruptcy if you desperately want to prevent foreclosure and if you have a significant amount of income you can dedicate towards the bankruptcy payments.
8. Short sales are a good option if you owe more on the property than it is currently worth. A short sale means the bank accepts less than what they are actually owed, and would allow you to get out of the loan, at least. The bank would not be able to come after you for the rest of the loan amount, since, by accepting a lower amount, they forgive the rest of the debt owed on the mortgage.
9. Sell outright if the property is worth enough and you have a willing and able buyer. List the house yourself of through a local real estate broker. In some cases, it is the right decision just to unload the house to stop foreclosure and focus on repairing your credit until you can purchase a new, more affordable home in a few years.
10. If 1-9 do not work, you can offer the bank a deed in lieu of foreclosure, which means you're voluntarily giving the property back to the bank and they are agreeing that the property is payment in full of the loan. This is not much better than a foreclosure, and you have to leave the property anyway, but it will prevent the sheriff sale and eviction process. The bank will not be able to ask for any extra money or sue you for a deficiency judgment, because they accept the property itself as satisfaction of the loan.
11. If 1-10 do not work, you can just move out and walk away and forget about the property. This is definitely not recommended if you care about your credit and plan to borrow money for several years, but foreclosure should teach you not to rely on banks to help you out when you face a hardship. All they really do is promise great deals when you think of going with them, and then throw you to the foreclosure dogs if you miss a payment. Many homeowners simply walk away because the foreclosure situation is so intimidating, but, as listed above, there are numerous options that are better than just giving up on the property.
Those are the most common options that can be used to stop foreclosure. There are a few others (suing your bank, etc.), but they involve much more cost and legal involvement and may not end up stopping the foreclosure process in the end.
Good luck.
ForeclosureFish
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