What to Do Before Foreclosing on Or Short Selling Your Underwater Mortgage

If you have decided to foreclose on your underwater mortgage, congratulations! We know what a hard step this is to take, and we admire your courage in putting yourself and your family first.

With everyone from the government to pundits telling us we should hold ourselves to different, higher standards than the banks and lenders do, it can be really hard to see the trees for the forest, can not it?

But you've made the decision, and in at most a few years, you will not even have a concern about your underwater mortgage anymore. However, you need to do things correctly to prepare yourself for your foreclosure and for life after this mortgage.

First-before you miss a payment do a financial assessment. Are you going to need a new car in the next 5 years? If you buy it now, you'll save yourself a lot of money in higher interest payments later. Also, do what you need to do to make sure you'll be able to stay on time with all of your other bills after you stop paying your mortgage.

This will make it easier for you to get credit after your mortgage is foreclosed on, or you short sell your home.

Next, we'd like you to consider taking the lead in this process and doing everything you can to arrange a good short sale for yourself. Hire a sharp Realtor who knows the short-sale process inside and out to negotiate with your lender and to list your house for you.

Now, whatever you do, do not trust your lender's word ! Make sure you get the agreement to accept a short sale from your lender in writing . This is where your Realtor is really going to be helpful. Remember that these financial institutions are 'dealing with and we all know we can not trust a single one of them, especially the large national banks.

Regardless of what your lender says, have your Realtor research what your house is actually worth and then list it with them for the short sale. Your mortgage lender will just sell it for pennies on the dollar-if they do that, they may have an actual incentive to come after you later. By taking the reins in the short-sale process, you get to protect yourself. And whatever you do, do not let your lender pick the Realtor you use!

Do not fret over finding the right Realtor either. Feel free to contact us and we'll help you find an educated, certified short sale Realtor in your area.

In addition, short sales are not short. Given the housing market, putting your house up for short sale just gives you more time to live in your house without making payments so you can start planning for your future.

You may also want to apply for a mortgage modification, instead of listing your home as a short sale. Now, two out of the three available configurations will actually cost you more money in the long run, and one of them is only going to help you if you're not in an adjustable-rate mortgage (ARM). Oh-and less than 3% of families are approved for them. But when you apply for a modification, everything stops until you get an answer from the bank that you are either approved or not for your loan modification. This gives you even more time in your house, mortgage-payment free!

But here's the most important thing we can tell you about dealing with your underwater mortgage-remember that your family is more important than your house and all of your possessions combined. Do not let any mortgage lender, any government official, or any blow-hard pundit tell you otherwise!

With everyone from the government to pundits telling us we should hold ourselves to different, higher standards than the banks and lenders do, it can be really hard to see the trees for the forest, can not it?

But you've made the decision, and in at most a few years, you will not even have a concern about your underwater mortgage anymore. However, you need to do things correctly to prepare yourself for your foreclosure and for life after this mortgage.

First-before you miss a payment do a financial assessment. Are you going to need a new car in the next 5 years? If you buy it now, you'll save yourself a lot of money in higher interest payments later. Also, do what you need to do to make sure you'll be able to stay on time with all of your other bills after you stop paying your mortgage.

This will make it easier for you to get credit after your mortgage is foreclosed on, or you short sell your home.

Next, we'd like you to consider taking the lead in this process and doing everything you can to arrange a good short sale for yourself. Hire a sharp Realtor who knows the short-sale process inside and out to negotiate with your lender and to list your house for you.

Now, whatever you do, do not trust your lender's word ! Make sure you get the agreement to accept a short sale from your lender in writing . This is where your Realtor is really going to be helpful. Remember that these financial institutions are 'dealing with and we all know we can not trust a single one of them, especially the large national banks.

Regardless of what your lender says, have your Realtor research what your house is actually worth and then list it with them for the short sale. Your mortgage lender will just sell it for pennies on the dollar-if they do that, they may have an actual incentive to come after you later. By taking the reins in the short-sale process, you get to protect yourself. And whatever you do, do not let your lender pick the Realtor you use!

Do not fret over finding the right Realtor either. Feel free to contact us and we'll help you find an educated, certified short sale Realtor in your area.

In addition, short sales are not short. Given the housing market, putting your house up for short sale just gives you more time to live in your house without making payments so you can start planning for your future.

You may also want to apply for a mortgage modification, instead of listing your home as a short sale. Now, two out of the three available configurations will actually cost you more money in the long run, and one of them is only going to help you if you're not in an adjustable-rate mortgage (ARM). Oh-and less than 3% of families are approved for them. But when you apply for a modification, everything stops until you get an answer from the bank that you are either approved or not for your loan modification. This gives you even more time in your house, mortgage-payment free!

But here's the most important thing we can tell you about dealing with your underwater mortgage-remember that your family is more important than your house and all of your possessions combined. Do not let any mortgage lender, any government official, or any blow-hard pundit tell you otherwise!

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Source by William Bud Gragg Jr