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In Part I, suggestions were provided for selling your home in a difficult market. In Part II, we will take a look at dealing with the results of adjustable rate mortgages.
It would be virtually impossible not to have heard about people losing their homes due to an increase in their monthly mortgage payments. This is due to the reset of an adjustable rate mortgage. Foreclosure rates have reached record proportions.
Unfortunately, many people who wanted desperately to purchase a home received bad information on their loans. Nearly 80% of homeowners who accepted an adjustable rate loan never researched the consequences.
The result is that many people can no longer afford the homes they have worked so hard to purchase. If you are in this situation, you do have alternatives. Ideally, you do not want to go through a foreclosure for many reasons.
If your mortgage lender is willing to negotiate, this is the best way to deal with a potential foreclosure situation. Some will; some won't. It is worth asking the question.
On occasion, a mortgage lender will forgive late payments and simply tack them onto the end of the loan in order to keep mortgage payments flowing. Others may restructure the loan for smaller monthly payments.
Keep in mind that a mortgage lender can borrow money at a better rate than you can. They will then offer you a loan at a higher percentage than they pay. This is simply finance. It does mean, however, that there is room to negotiate.
Another alternative is the short sale. A short sale simply means that a mortgage lender is willing to accept a purchase amount less than what is currently owed on the property.
Five years ago, short sales were not a topic of conversation. There was no reason for them since home values were appreciating, not declining. A homeowner could always expect to make more on the sale of their home than what they paid for it.
Now, however, short sales are a good alternative to foreclosures. If you are going this route, make sure your agent understands the short sale process. Ask them how many short sales they have completed successfully. Ask them if they have someone who can act as a reference.
Short sales can be very nerve-wracking. A bank can still foreclose on a home even if there is a willing, qualified buyer. This can happen even before the short sale can be completed.
If you are able to complete a short sale, you walk away with cash. Albeit, not as much as a "normal" sale. However, your home has not been taken away from you as it would in a foreclosure situation. You can start life again without the onus of a foreclosure which will pursue you in your future financial endeavors.
Let me remind you that 90% of all home sales undertaken by the homeowner (FSBO – For Sale By Owner), end up with a real estate agent being involved. If you are in a tough home selling situation, consider hiring an expert.
There are a lot of real estate agents out there. You have many alternatives and many choices. The best solution would be to hire a professional just as you would when you are having your car or teeth worked on.
A good real estate can bring a wealth of knowledge to the transaction. Interview several. Use the internet to help you search and compare. If you absolutely have to sell your home in this tough market, use the resources you have available to you. Don't simply give up or feel that you do not have choices and alternatives. You do!
Visit www.homegain.com to find a Realtor, get the value of your home or view homes for sale.
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The content on this page is created and edited solely by Real Estate Economy Watch. The views and any other information expressed or made available on this page are those of Real Estate Economy Watch and are not those of UPI.
