Top Options for Upside-down Mortgage Holders

Top Options for Upside-down Mortgage Holders

Tons of homeowners are underwater on their mortgages and looking for ways to dispose of these properties.  Of course, because the mortgage of these properties exceeds the current property value, these homeowners are in quite a bind.

In these situations, homeowners will likely ‘default’ on the property.  Homeowners will strategically default on their homes when the mortgage exceeds the property value in combination with the neighborhood beginning to decline.  There are a few ways to dispose of your property without making a full payment to the bank.

Homeowners can choose loan modification, and restructure the term’s of the borrower’s loan.  This option however does not make for any principal reductions in payments.  A deed in lieu of foreclosure occurs when the homeowner, with the bank’s consent, deeds a property back to the lender, instead of foreclosing altogether.  Foreclosure is another option.  This of course, occurs when a lender takes the property back from the delinquent homeowner.

The best option, however, might be a short sale.  Short sales occur when a homeowner sells the property for less then when he owes.  Homeowners must get the bank’s consent before the sale, as well as word that they will forgive the deficiency on the sale.  Short sales are a great option because there’s less paperwork, less hassle, and nobody needs to declare bankruptcy or take the time and energy to foreclose.



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Housing Assist Coldwellbanker