Forbearance or Re-Payment Plan
If the issue that caused you to miss payments was temporary and you are not able to make a one-time reinstatement payment, you may be able to negotiate a forbearance or repayment plan. If you do not have the means to repay all of the missed payments and legal fees, then this is another option that also reinstates the mortgage. The lender may allow you to pay the missed amount over a period of time, or they may place the missed payments on the end of the amortization of the loan.
Mortgage Modification
In some cases where you have the means to afford your payments or very close to your mortgage payment, your mortgage company may qualify you for a mortgage modification. You will have to qualify for a modification by sending in proof of income, and expenses. If this option is available, it is an excellent option for you to keep you property.
Refinance
If there is significant equity in your home, you have stable income, and your credit has not been too badly damaged, you may be able to refinance. This is typically a short term solution since the payments on the property will typically increase considerably due to the refinance.
Short-Refi
This is a relatively new option, but it does show just how far some mortgage companies and lenders are going to avoid foreclosing on properties. This process involves the refinance of your home with a reduction in the principal balance, and often the interest rate as well. You will have to qualify for this process both in shoring a hardship as well as showing the ability to payy the new mortgage through a fully documented qualification process.
Rent The Property
If your current mortgage payments are low enough, you may be able to rent your home for an amount that covers the mortgage payments. With this option, it is important that the market rents cover all of the monthly expenses including property taxes, insurance, condo fees, and homeowner association fees. Renting the property is risky because if the tenants miss a rent payment, then the financial distress has returned.
Sell The Property
If there is enough equity to sell your home, you may be able to sell and clear a profit. Otherwise, you can sell your home as a short sale. The lender will require documentation that you are facing a financial hardship and can no longer afford your mortgage payments.
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IMPORTANT GOVERNMENT DISCLOSURE: You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance we obtain from your lender (or servicer). If you reject the offer, you will not have to pay us for our services. RE/MAX Alliance is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.
RE/MAX Alliance is not engaged in the practice of law nor gives legal or tax advice. It is strongly recommended that you seek appropriate professional counsel and tax advice regarding your rights as a homeowner.
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