In these uncertain times of job loss and home values deflating many home owners are lost in what to do when they are faced with the heart wrenching fact that they can’t make their mortgage payments.  So, when faced with this realty what do you do?  What are your options?  Well, what so many people don’t know is that your mortgage company will work with you to help you avoid foreclosure.  The fact is they don’t want your home; they want you to make your payments because that is how they make their money.  So the question is… 

Is there a way to avoid foreclosure?

Well the answer is yes! If you know ahead of time that you are just not going to be able to make the mortgage payments on your home, you have options to help save your credit and avoid foreclosure. 

You might fit into one of these two situations:

1. You have no equity because you, either just bought your house, or you just refinanced.
2. You have built up equity in your home, but can’t refinance because you have lost your qualifying income.

Well, what do you do?…Foreclose or Short Sale?

 If you fit into the second scenario, then you need to sell and sell fast, to avoid foreclosure.  The way to do that is to sell and list below everyone else in your neighborhood.  Many people think that selling high will give you money to pay off other bills, loans, money for expenses, etc. Well, this would be great, but selling your home will relieve you of a huge burden of not being able to make the mortgage payments and save you from going into foreclosure. Everything else can be paid off later.  Like my grandma always said, “Don’t count your chickens before they hatch”.  

Second, for those of you that have no equity you are faced with having to bring money to closing or you have to foreclose.  Well, you have an option of doing a short sale with the bank instead of waiting till the bank forecloses.  You will have to sell your home, but the bank will allow you to sell for less than what you owe on your home.  Keeping you safe from foreclosure.

So once you believe that you won’t be able to make a mortgage payment, you need to call a real estate agent that has experience with short sales and have them put your home on the market.  Notify your bank that you are planning to sell, because you can’t make your payments.  The earlier you do this the more time you will have to sell in this slow market.  Don’t wait till it is too late, because the bank will not wait to foreclosure on you.

Gina Bombin, Short Sale Professional, Wheatfield, Indiana Real Estate

McColly Real Esate