If you fall behind on your mortgage payments on your Port Charlotte home, it can feel like you’re drowning in debt.
Even if you’re able to make your monthly payment, catching up on a past due balance can be an overwhelming challenge.
There are a few options that can help you to avoid foreclosure and maybe even keep your house, even if you’re seriously behind in payments. Many properties in Port Charlotte – and surrounding cities are behind on mortgage payments and facing foreclosure, but there are ways to avoid it.
5 Things You Can Try To Help Your Situation
1. Transfer title
We work with homeowners in Port Charlotte and surrounding areas to find solutions to foreclosure problems.
Transferring title is a form of property sale. It’s called a “subject to” transaction. A real estate investor offers to make up your back payments and take over your property, subject to the existing mortgage.
The title of the property goes into the buyer’s name, though the mortgage stays in your name until the loan is paid off.
You may ask, “How do I know the investor will make the payments?” The answer is quite simple: The investor just made up all of your back payments and now has a financial stake in the property. It only makes sense that he makes your payments to protect his investment.
This type of sale is becoming quite common. The benefits to you:
- You don’t have a foreclosure on your record;
- You may get some cash immediately to start fresh;
- You immediately solve your looming foreclosure; and
- Your credit gets built back up through no effort of your own, because the investor makes up your back payments and begins making your monthly mortgage payments on time every month.
Before long, your credit score is once again in good standing. You should look for an investor who’s experienced in this type of solution, and who is a member in good standing with the Better Business Bureau. My network of investors have performed many “subject to” transactions. Call me to discuss the possibility of doing one with you.
In today’s marketplace, there are many different types of financial institutions that lend money. Although you may not be able to refinance with your local bank due to your current situation, there are many mortgage companies and lenders who specialize in creative financing solutions. That’s how they can compete with the big banks. They are often able to review your situation and find a solution to your needs.
It is true that the loan you get will probably have a higher interest rate than a regular loan. But if you have a good amount of equity in your property, the ability to refinance will most likely be a good option that’s available to you.
I would be happy to recommend one or more quality mortgage brokers who may be able to help you in your situation.
3. Bring your mortgage current:
I know what you are thinking: “If I could bring my mortgage current, I wouldn’t be in this situation!” That may be true, but have you investigated every possible way that you may be able to get the needed funds?
Can you borrow it from a friend, family member or co-worker? Can you sell something? Does your employer have any hardship loan programs such as 401k or Roth IRA? Do you have cash value in a life insurance policy? Brainstorm with family members or close friends. The more you think about it, the more likely it is that someone will remember or come across a solution.
Declaring bankruptcy is viable option to being foreclosed upon, but it should be used only as a last resort. Also, use it only if you know that you will be able to keep up with the future loan payments. Otherwise you’re just postponing the inevitable, and the longer you wait, the less money you will walk away with from your property.
A bankruptcy will be reported on your credit report for seven years. The bankruptcy will also be reported in the financial section of the newspaper—it’s a requirement from the bankruptcy court.
The point is that bankruptcy should be your last resort. If you truly have no other alternative, call us and we will give you the names of two or three reputable bankruptcy attorneys. In many situations, either I or someone in my investor network can pay cash for your home and can close within 7-10 days.
5. Ask Your Lender for a Loan Modification:
The lender does not want to foreclose. That’s because lenders are in the business of having their money at work in loans, and not sitting in a property they have taken back through foreclosure. Not only is that a black mark on the lending institution, but it hurts their financial picture as well.
Therefore, in many instances lenders are willing to do “workouts”. What this means is that they are willing to work out the back payments that are owed, until you become current again.
A typical workout would be the lender taking the full amount of your back payments and dividing that number by 12 or 24. They would then add that amount to your current payments, until you are paid off.
When considering a workout, you’ve got to be able to make that extra payment each month or you will be right back where you started—in the foreclosure process for the second time. At that point, the bank will not look very favorably upon your situation.