If you foresee there isn’t a financially feasible way to keep your home, here are more options for you to avoid the foreclosure process.
Traditional Sale:
Work with a real estate agent to sell your home for an amount that generates proceeds sufficient to pay off your mortgage in full.
Best option for those with equity in their home.
Short Sale:
Selling your home for an amount that generates proceeds insufficient to pay off your mortgage in full.
An agreement where the investor may accept sale proceeds less than the total amount owed on the loan. Once a short sale is completed, the loan will be released.
Short sales can help you leave your home and may have a smaller credit impact than a foreclosure.
Cancellation of debt may have tax consequences. Please consult a tax advisor to discuss potential tax consequences.
In some circumstances, you may be responsible for the difference between the sale proceeds and the total amounts owed on your loan.
Preferred option for those who have little or no equity in their home.
Deed In Lieu (DIL):
An agreement with your investor where you will agree to transfer ownership of your home to your investor, the remaining balance is discharged, and the lien is released.
If you’re unable to qualify or complete one of the options above, you can be considered for this option without having a foreclosure on your record.
You may be able to obtain funds to help relocate to another living arrangement.
While this protects you from formal foreclosure, it will impact your credit.