You have six options: stay and wait, modify the loan, refinance, short sale, deed in lieu, or foreclosure and bankruptcy. The right one depends on your payment history, your income, and how long you can hold on.
You have six options, and the right one depends on your payment history, your income, and how long you can hold on.
1. Stay put and wait
If you can afford the payment, you may be able to ride it out until values recover. This only works if the payment is sustainable.
2. Ask for a loan modification or forbearance
If you are behind or about to be, ask your servicer about modification, forbearance, or repayment plans. Free HUD-approved housing counselors can help you apply.
3. Refinance
This is hard when you have little or no equity, but some programs can help. Ask a lender.
4. Short sale
You sell for less than you owe with the lender’s approval. Get any deficiency waiver in writing.
5. Deed in lieu of foreclosure
You hand the property to the lender voluntarily. It is often simpler than a foreclosure, but it may not release you from the balance, so get the terms in writing.
6. Let it go to foreclosure, or consider bankruptcy
Foreclosure is usually the most damaging path. Bankruptcy has long-term consequences. Talk to a bankruptcy attorney before choosing it.
How to choose
Ask three questions: Can I afford the payment a year from now? Is my home likely to be worth more than I owe in the next few years? How soon do I need to move?
What to do this week
Pull your payoff and your lender’s contact information. If you cannot make the payment work, send me the address and the numbers, and I will lay out your options.
Disclosure: I am a licensed REALTOR with eXp Realty, and I also invest in homes through my own company. If I am ever the buyer, I will tell you in writing before you decide.
General education, not legal, tax or investment advice. Discuss your circumstances with a licensed Florida attorney or tax professional. Yoganand Ganeshram PA, licensed Florida real estate agent with eXp Realty. Equal Housing Opportunity.
Originally published on Equity Edge Orlando. Reviewed for this Substack edition.