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To identify your alternatives you must first determine your financial situation:
- Solvent – Your monthly income exceeds your monthly expenses, and you have some savings or assets.
- Income = Expenses – Your monthly income equals your monthly expenses with little or no savings or assets
- Insolvent – Your monthly expenses exceed your monthly income with no savings or assets.
Next you need to determine the equity position on your property:
- Positive – Your home is worth more than what you owe on your loan
- Value = Loans – Your home value is equivalent to what you owe
- Negative – Your home is worth less than what you owe
Now review the chart below to see what options might be available to you.
- Sale – Sell property, pay lender(s), may require cash to close
- Refinance – Replace loan in foreclosure with new financing, may require cash to close
- Loan Modification – A voluntary adjustment of the terms of a loan by the lender to enable the homeowner to continue making payments, may include repayment plan for missed payments
- Short Sale – Sale transaction in which lienholders agree to accept less than full amount owed to release