September 28, 2020 at 9:30am | Lisa Crumby
In today's world where unemployment in the U.S. is high and people are finding themselves in hard places, it is important to be armed with knowledge and options.   If you find yourself in a position where you are not able to make your home payments, you may need to look at either doing a Short Sale or allow the bank to Foreclose on you.  

The first step is to contact your mortgage company to find out what options they have to offer with your hardship. They may have options for deferment or re-financing your mortgage. Make sure you read the fine print. Some deferments force you to make up the payments at the end of the deferral period. You don't want to be stuck making three months worth of payments all at once.

If these options are not available or not optimal, you may want to consult with a realtor. Find out the value of your home and how much you can get in today's market. We can help with that with a free no cost and no obligation consultation. Once you know what you can sell your home for after fees and commissions, you will know how much, if any, you are upside down on what your pay off from the bank is. (this should be a part of the information you get from the bank when you are talking with them)


A Short Sale is when you sell your home contingent on the bank accepting less money for the pay off than what you owe. The difference will hopefully be forgiven through the Short Sale request process but some banks will hold the right to still attempt to collect on the difference. The benefit of a Short Sale over a Foreclosure is the hit to your credit and the ability to be able to purchase a home in the future. Short Sale's have less of an impact on your credit as long as your payments are being made. You may also be eligible sooner for a new loan if you find yourself in a better position sooner than later.

Foreclosure is the final option. A foreclosure ensues when you stop making payments and the mortgage company goes through the process of taking ownership on the home. This process hits your credit and can decrease it up to 300 points in some cases. It take's roughly 7 years from the foreclosure date to be able to qualify for a new home loan.

If you have found yourself in this type of situation, you truly want to surround yourself with trusted advisors that can help you through the process.  Always review all paperwork and know what you are getting into whether you hire an agent, lawyer or your accountant to help.  
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