Studies show that more than 70% of homeowners enter into foreclosure without a clear understanding of what lies ahead.
I have prepared the following foreclosure information in an effort to educate families who may be in economic distress:
Loan Modification
If you are seeking to secure a more affordable monthly mortgage payment, then a loan modification may be your best option. The terms, interest rate and/or principal balance of your current Petersburg VA home loan can be lowered to provide you with a loan that is more manageable when taking into consideration your current financial situation.
Pro: Eases financial burdens by reducing monthly payments on your loan via modification of the interest rate, principal balance, term of the loan or a mixture of any or all of these.
Con: It can be an expensive process that may actually raise your monthly mortgage payments. Your credit rating also must be in a good standing.
Short Sale
If you are currently in financial hardship and owe more on your Petersburg VA real estate than it is now worth, then hiring an experienced realtor (preferably equipped with the knowledge and know-how obtained through Certified Distressed Property Expert training) would definitely be a wise choice. Your realtor should be well prepared to both market and sell your Petersburg VA home through effective negotiations with both the buyer and your lender.
A financial hardship can be in the form of various conditions, such as mortgage payment increases, unplanned relocation, job loss or even divorce. The hardship must have occurred between the date of purchasing your Petersburg VA home and the date of the short sale.
Pro: An option to avoid foreclosing on your Petersburg VA home, a short sale allows you to reclaim some of your credit rating. Opting for a short sale will also keep your public records clear of any foreclosures noted and you may qualify for another mortgage in as little as two years, versus more than 5 years through foreclosure proceedings.
Con: Short sales can be a very lengthy process (often taking at least 2-3 months to close from time of an accepted sales contract). The experienced assistance through a CDPE realtor is highly advisable.
Repayment Plan
Petersburg VA real estate owners have the option of negotiating with their lender to develop an approved repayment plan (also known as Forbearance) of back payments due. You can pay your normal monthly mortgage payment plus add on the portion of back payments owed over a period of time.
Pro: By renting out your Petersburg VA area home, you can keep your home for as long as you wish – waiting for the market to rebound and gain more equity.
Con: Rental properties can often be a hassle with tenants not paying their rent, creating damages to your home, etc., Also, obtaining enough rent each month to cover the mortgage payment is often not possible, so will cost you to keep it.
Servicemembers Civil Relief Act (available to military personnel only)
Law H.R. 100 (the Servicemembers Civil Relief Act) which was signed into law on December 19, 2003 by the President of the United States of America, was completely rewritten from its original content within the Soldiers and Sailors Civil Relief Act of 1940, expanding many of the previous law’s civil protections. If you are a servicemember of the military who, during deployment, is facing financial distress, you may qualify for relief under this 6 year new Act. The American Bar Association (ABA) has lawyers that work specifically with military personnel to assist them with this financial relief program.
Pro: Not only does this have the possibility of lowering payments on your Petersburg VA home mortgage payments, but all consumer debt needing help.
Con: You must be active within the military to qualify for this program.
These are just a few of the options available to you. Remember, focusing on YOUR goals and needs and helping people just like YOU in Petersburg VA real estate, Colonial Heights VA real estate, and Hopewell VA real estate while delivering A-May-zing service is what this real estate professional offers!
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