Before you Consider Foreclosure, Read This

Many homeowners are in a tight situation these days with some owing more than the home is worth, subprime loans making the payments too high, or sellers unable to unload their homes for what they need.

There are other options to and alternatives to foreclosure as this should be your very last option. Foreclosures can stay with you a long time and seriously damage your credit.

1. Loan Modification - This is where your lender can take various steps to help you in the process. There are several ways they can do this:

• Loan Reduction. A process by which the lender reduces the amount you owe on your home. If you can show proof that homes like yours in your area have recently sold to buyers for less than what you owe on your home, the lender may agree to lower your loan amount. Lower loan amount equals lower the monthly payments.
• Extension. This loan modification extends the term of your loan. Your payments are lowered and spread out over a longer period of time.
• Interest Rate Reduction. This option is especially favorable if you have an adjustable rate mortgage that has risen so high that your payment is no longer affordable. Often, the bank would rather reduce the interest rate than foreclose. [See our Chelan real estate partner for more on this topic]

2. Short Sale - Although this may damage your credit it won't be as bad as a foreclosure. When the bank has been notified that you cannot make your payments any longer they will often times list it for less than you owe just to get rid of it. It can be a lengthy process and one you have little control over in the process but it could be a better option than foreclosure. [For more on the short sale visit our Clarksville homes expert]

3. Rent or Lease your home - This is going to depend heavily on the rental situation in your neighborhood or community. You will probably need to make enough to cover the mortgage payment but it may be an option for your situation.

Each of these has pros and cons to its decision but can greatly help in a pre-foreclosure situation. Please call our office right away if you are thinking of foreclosure. Our agents are helpful and will walk you through whatever process is right for you situation. We want to help all our sellers of Pullman homes and real estate.