Short Sale or Foreclosure – A Snapshot:

I f you are currently in a situation where you are wondering whether you should attempt a short-sale or allow your home to go into foreclosure, or even declare bankruptcy, there are many things to consider and a couple people you should consult.

Generally speaking a Short-Sale will not damage your credit as deeply or for as long as a foreclosure, and a bankruptcy does the most damage.  The difference between a short sale and a foreclosure is three years vs. ten and 80-120 points on your credit score.  And what about the debt? A foreclosure will almost always [Read more…]

Tips on Avoiding Foreclosure

I f the downturn in economy the is hitting you in the pocketbook and you’re beginning to worry about how you’re going to make that next mortgage payment the following tips may be just what you need.

  • 1) Act quickly. If you have missed a payment, or are about to miss one, take action now. The more you put off dealing with the issue, the more difficult it may be to avoid foreclosure.
  • 2) Don’t procrastinate, communicate! Call your lender as soon as you realize you’re having a problem. Lenders would much rather try and work something out with you upfront rather than have another home to sell. As long as they know you’re making an effort and keeping communication open some may even adjust your payment options.
  • 3) Speak to a HUD approved housing counselor. Many are free or quite reasonable and have direct contact with the National Hope for Homeowners program.
  • 4) See if you qualify for a loan modification or reduction. Ask your lender about this, again, they would rather work with you than go through the foreclosure process.
  • 5) Get control of your money. Track it. See where it goes and where you can cut back. Do you need to have car payments? Do you need expanded cable, or will basic do? From $4 coffee drinks, internet and cable subscriptions look at your expenditures carefully and maybe you’ll find you have a little more than you thought.

If you make the effort to follow the above steps: Act quickly and communicate honestly with your lender about your efforts you’re much more likely to avoid falling into foreclosure.  If it just doesn’t seem you’re going to be able to pull it out contact a local Real Estate Agent who has experience working with banks and can help you attempt a short-sale. No matter which direction you are headed, putting things off complicates them so act now if you find yourself in financial hardship.