When you fall behind on your mortgage payments on your Killeen home, it can feel like you’re drowning in debt. Sometimes it’s your primary home but often it’s a property you bought and then moved and are renting out. Then the tenants stopped paying. Or maybe the property manager disappeared?
Even if you’re able to make your monthly payment, catching up on a past due balance can be an overwhelming challenge, and I know, sometimes you just don’t want to, particularly if you aren’t even living there
There are a few options that can help you to avoid foreclosure in Killeen and maybe even keep your house, even if you’re seriously behind in payments. Lots of properties in Killeen have been lost to foreclosure, but there are many ways to avoid it.
Help, I’m Behind in My Mortgage Payments in Killeen! 5 Things You Can Do To Help Your Situation
Although I am listing it first, this should be the tool of last resort. If you are way behind, you owe more than the house is worth or the repairs are just too much to make it work this may be the path forward. Just be aware, it will most likely demolish your credit and the bank *may* still come after you for any shortages once they sell of the house. It’s pretty rare but it definitely happens!
There is another “option” that I will list here and that is “deed in lieu of foreclosure”. It’s basically the same thing but the bank agrees to forgo the actual forceful act of taking back the property and you sign the deed over to them. This is generally a little more favorable but just be aware that not all servicers will offer this and they can still come after you for shortages.
2. Making Home Affordable (MFA):
If your mortgage qualifies, you might be able to participate in MHA. Any loans backed by Fannie Mae or Freddie Mac must be considered for MHA, and other lenders choose to participate in MFA.
With MFA, your payments and/or interest rates might be lowered – even the principal balance (if your home is worth less than you owe). If you’re unemployed, you might be able to get your payments temporarily suspended or reduced.
MFA is a government program, so be prepared to deal with lots of paperwork. It ain’t free money – you gotta work for it.
3. Negotiate with your bank:
Lots of lenders routinely offer some level of assistance. You have to work hard at it, but you might be able to get your interest rate reduced or a temporary reduction in your payment.
Most of the time, lenders will want to steer you to refinance your loan – but by the time you’re a few payments behind, you probably don’t qualify for a reduction in interest rate.
You have to work really hard to negotiate with a bank. Usually, it takes lots of calls and the patience of a saint to get through the bureaucracy. Never, ever act rude. Ask for help from everyone you speak with, but don’t sound desperate. Explain your situation, offer supporting documents, and reassure the bank that you want to live in your home for the long term.
If you’re in need of a temporary fix and want to stay in your home, most banks can be forgiving. Sometimes they’ll be willing to add a few months of payments back onto the primary balance of your loan. It’s all dollars and cents to them, so remind them that you need their help to give them a lot more money in the long run. If they have to sell your house at a foreclosure auction, they’ll take a huge loss.
That sounds obvious, but for some reason, bankers seem to forget it when saying no to someone in need of help.
4. Short sale help for a foreclosure in Killeen
A short sale is the third strategy — this is where you sell your home and put the proceeds of the sale toward the amount owing on your mortgage loan. A short sale is a good option to explore and we actually have a close team member who helps process short sales.
- It’s proactive, which means that you take matters into your own hands (that’s a major stress eliminator because so much of the stress of foreclosure comes from the process being completely out of your control).
- It’s fast — in some cases, you can sell your home in as little as a week! That’s also because it’s local: You can get help for foreclosure in [market_city] since organizations like [company] help people going through short sales.
- It’s very effective because a short sale can completely wipe out (or almost wipe out) the amount owing on your mortgage. If there is any amount left over that is not covered by the sale of the property, you’ll be responsible for it (although you can sometimes work out a deal with your lender).
With a short sale, you still end up with the reality of having to leave your home but there is a bright side: The impact to your credit is much less (compared to a bankruptcy or a foreclosure) so this is a smart long-term play to give yourself some options.
That said, most people do not actually qualify for short sales as the requirements are pretty onerous and you have to have a legitimate financial reason that you can’t pay. And they will look at ALLLLL your finances!
6. Work with us!
At the end of the day it can be tough or impossible to avoid a situation where you need to give up a property. If you want to try to avoid a costly foreclosure and the major ding to your credit, give me a call. I may have some options that keep you in a home but even if you need to sell we can try to get you the best deal possible, and maybe even a little cash in your pocket.