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Underwater Mortgage Options

  Ashburn, Virginia

Underwater Mortgage OptionsHas the housing market crashed in your area and left you owing more than your house is worth? Now you have an Underwater Mortgage (Upside down Mortgage) and your thinking. Do you walk away? Do you let it go to Foreclosure? What about your credit? Try to sell the property? Short Sale? Any Government Programs? and many others. What are my Underwater Mortgage Options?

Underwater Mortgage Options

We will cover the most popular Underwater Mortgage Options available for homeowners. There are programs that will: damage your credit, homeowner pays out-of-pocket expenses, forces homeowner to move out, refinance the property but you still will owe more than its value, and many others that will negatively affect the homeowner,

Underwater Mortgage Options

There are many Underwater Mortgage Options to pick from.

Underwater Mortgage Options

Underwater Mortgage Options #1-Walk Away-Foreclosure

A homeowner may consider walking away from the house, thinking there is no way to ever get any equity out of the property.  Depending on the monthly mortgage payments a person might be able to buy a BIGGER and BETTER house for the price they are paying each and every month.

Walking away and letting the bank take the house will damage the credit score (late payments  leading up to Foreclosure); however, if a person is able to get the 2nd house PRIOR to letting the 1st one default, they would have a better credit score to obtain the 2nd property.

When the property is sold at Foreclosure and the amount sold for does NOT cover the loan amount, the bank may go after the homeowner for the difference  called a  Deficiency Judgement. Many times the banks will cut their losses and move on, but few banks will do it if the amount is large enough.

** IF a homeowner elected to go this road they might be giving up money they could get from the bank.  MANY banks will provide some money “Moving Expense”  if they elected to do a short sale.  IF you are electing to walk away from your house try to sell it by doing a Short Sale. 

**** We would be interested in doing a Short Sale with you.  EVERY Short Sale we do, we negotiate with the bank to let the homeowner get some money. 

CLICK HERE TO SELL YOUR PROPERTY.

Underwater Mortgage Options #2-Short Sell

If the homeowner has an underwater mortgage OR is in Default (not paying the mortgage) a person might be able to do a Short Sale.  A Short Sale is when someone who wants to buy the property, but at a reduce amount from the bank.

IF the bank reduces the amount owed, the buyer buys the property and the homeowner moves out.  The bank may come after the homeowner for the difference from the original amount of the loan and the discounted price (Deficiency Judgment). Many times the bank take the loss and moves on.  This process takes 6-9 months. Many Short Sales fail due to taking too long.

Some times the bank will issue a tax form 1099 to the homeowner for the difference of the balance and the sold price.

*** IF you have elected to do a Short Sale we would be interested in buying your property. In every Short Sale we do we negotiate that there is NO Deficiency Judgement, NO 1099 for the homeowner, AND we negotiate to get the bank to give some money to the homeowner for “Moving Expenses”.  In the past we have been able to get the homeowner amounts from $500.00 – $30,000.00 (EVEN IF the homeowner owed more than the house was worth) to do a short sale.  The amount depended on the amount of the house.   

CLICK HERE TO SELL YOUR PROPERTY.

Underwater Mortgage Options #3-Deed in Lieu

If you are a homeowner who has not paid their mortgage payments and are facing a Foreclosure, a person may consider a Deed In Lieu.  The person has no desire to stay in the house and wants to preserve their credit as much as possible. However, by this point there are many negative marks on the credit report due to the late/missed payments.

Many people are unaware of this option.  Basically, you tell the bank you will leave the property and sign the house back over to them without going through the Foreclosure process.  This will avoid a Foreclosure from your credit report.

Banks really do NOT want the houses. So doing a Deed in Lieu will force the bank to take back the house.  Now they have to get rid of it, which costs them money.

** IF a homeowner elected to go this road they might be giving up money they could get from the bank.  MANY banks will provide some money “Moving Expense”  if they elected to do a short sale.  IF you are electing to walk away from your house try to sell it by doing a Short Sale. 

**** We would be interested in doing a Short Sale with you.  EVERY Short Sale we do, we negotiate with the bank to let the homeowner get some money. 

CLICK HERE TO SELL YOUR PROPERTY.

 

Underwater Mortgage Options #4- Sell the Property

If the homeowner with an Underwater Mortgage no longer wants the house they may consider selling the house.  The problem is, since they owe more than the property is worth, will anyone want to buy a house MORE than market value-the answer is clear NO.  The homeowner would have to bring money to the closing table so that the next buyer is purchasing the property at market value.

You would be unable to use a real estate agent; since, it would cost more out-of-pocket expense.  A person might consider Sale by Owner, but your still faced with bringing money to the table at closing. No equity in a property is hard and it is even harder when it is Underwater.

IF you elect to go this road a homeowner will elect to go back to the Short Sale Option where an Investor will negotiate with the bank to buy the house.

*** NOTE: IF you have decided to Sell your house  We would interested in buying your house and doing a short sale. See Short Sale Option Above.

CLICK HERE TO SELL YOUR PROPERTY.

 

Underwater Mortgage Options #5-Refinance the Property

If the homeowner wants to Refinance an Underwater Mortgage to get a lower interest rate.  The problem is obvious,  there is NO equity in the property and the bank will not refinance a house that is upside down.  The homeowner would have to bring money to the closing table to get that lower rate.

 

Underwater Mortgage Options #6-Government Program HARP Program

It is a program that will allow people to refinance  a property from 105%-125% of the loan-to-value of the property.  A person can NOT have any late payments.  They are looking to remove the 125% loan-to-value guidelines.

IF your lucky enough for them to qualify they will lower the interest rate.

The program will not work with most people since the majority of homeowners with underwater mortgages are over 125% loan-to-value.  Furthermore, even if you do qualify for the program you still have a house where you owe MORE than the house is worth.

Bottom line:  May Not Qualify, If you do get in the program you still owe more than the house is worth, Possible Lower Interest Rate, Possible Lower Mortgage Payments.

Underwater Mortgage Options #7-Government Program HAMP Program

If you are unable to qualify for any other refinance program or if you are delinquent on your mortgage payments and are on the verge of foreclosing your best bet is often to seek a loan modification from your current lender. Loan modifications normally reduce mortgage payments by lowering interest rates or extending the loan period. NOTE: It does NOT lower the balance, it may lower the payment, but it stretches out the term of the loan. Typically it extends the term out to 40 years.

Obama’s new “Home Affordable Modification Program” (HAMP) gives lenders incentive to modify troubled loans as well. While the program provides government incentives of up to $1,500 to lenders to process these modifications, the ultimate approval rests with the lender. NOTE: Many banks do NOT do many loan modification’s due to the lack of incentive, too time consuming, and not enough staff.

To qualify, you must demonstrate financial hardship that puts your mortgage in imminent danger of default. The mortgage must be owned by Fannie Mae or Freddie Mac or by others signed up with the U.S. Treasury to qualify for HAMP.

***Please be aware though that all loan modifications remain voluntary on the part of lenders — the government-backed loan modification programs are not mandatory.***

 Bottom line:  May Not Qualify, If you do get in the program you still owe more than the house is worth, Possible Lower Interest Rate, Possible Lower Mortgage Payment.

 Underwater Mortgage Options #8-

“Refinance Underwater Mortgage Help” Program

The “Refinance Underwater Mortgage Help” Program will be able to help homeowners get a lower interest rate, reduce the amount of the mortgage loan, reduce the monthly payments, will increase their credit score, allow the homeowner to stay in their home, and build Equity back into their home.  More info about the program please CLICK HERE

Bottom line: Reduce Mortgage Loan Amount, Reduce Mortgage Payment, Reduce Interest Rate, Build Equity into the Property, Homeowner Stays in the Property,  and Increase their Credit Score.

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