Posted on: 13th Feb, 2009 02:21 pm
i purchased my town home when real estate was at its peak. here is a break down of my scenario
- purchased home through fha (very low down payment)
- home values have nose dived. 150k under water
- current on my mortgage
i cannot refinance, since i have no equity. i tried to talk to my lender. but i am going around in circles. it appears like the lender will not look at my case unless i default (not current)
with my current situations changing i am finding it harder to make payments. what are my options?
load modification? how do i approach this option?
short sale? should i pursue this option?
any comment / analysis / advise would be greatly appreciated.
- purchased home through fha (very low down payment)
- home values have nose dived. 150k under water
- current on my mortgage
i cannot refinance, since i have no equity. i tried to talk to my lender. but i am going around in circles. it appears like the lender will not look at my case unless i default (not current)
with my current situations changing i am finding it harder to make payments. what are my options?
load modification? how do i approach this option?
short sale? should i pursue this option?
any comment / analysis / advise would be greatly appreciated.
1. I would document your "current situation" and detail why it is harder to make payments now vs when you started the loan. If you can show them (not tell them) your income has declined, then they may consider a rate modification which would result in a lower payment. Do NOT expect to have them reduce your loan balance.
2. Get a second source of income to help with your payments.
3. Rent out a room in your home to help with the payments.
2. Get a second source of income to help with your payments.
3. Rent out a room in your home to help with the payments.
Hi Guest!
Welcome to forums!
Lenders offer the options of short sale, deed in lieu or loan modification only when you are past due on your payments. If you are current, they are reluctant to offer these options.
You will have to try and negotiate with the lender and convince him about your hardships. You will have to write a hardship letter in order to apply for a loan modification or a short sale. If you can convince the lender about your hardship through this letter then he may accept your request for short sale or a loan modification.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
Lenders offer the options of short sale, deed in lieu or loan modification only when you are past due on your payments. If you are current, they are reluctant to offer these options.
You will have to try and negotiate with the lender and convince him about your hardships. You will have to write a hardship letter in order to apply for a loan modification or a short sale. If you can convince the lender about your hardship through this letter then he may accept your request for short sale or a loan modification.
Feel free to ask if you have further queries.
Sussane
eric has given you some viable options, and they make sense. also, as sussane has noted, a lender isnt about to drop your rate, modify your payments, etc. without there being a rationale behind it. being current on your payments doesnt give them any reason to change things. of course, if you plan to sell, then you will need to document the market changes for their benefit so they can see the reality of a need for a short sale.
I realize that I should NOT be current on my mortgage to get the lender listen to loan modification requests.
If I default on payments will it impact my credit score adversely?
If I default on payments will it impact my credit score adversely?
Lenders will know if you default intentionally. You are not going to get a modification if you CAN make the payments. All you will do is harm in this case. If you lost your job and will run through your savings in a couple of months, then document the job loss. If you did not lose your job but your salary was cut and cannot make full payments, then document that. When I say "document", I mean provide a letter from your employer, supply before and after pay stubs, show bank account statements, etc etc
aah...a note of sanity in this wacky world of finance. thanks, Eric.