Once you sign on the dotted line when you purchase your house, you are giving a promissory note to the lender to pay your mortgage. You entered into a solid, long-lasting commitment. “how can I legally get out of my mortgage in Kent?” you might ask! Not only 1, but we will uncover 7 ways to get out of mortgage when behind on mortgage in Kent!
You get to leverage this knowledge to legally get out of your mortgage, if you are 3 payments behind on your mortgage, 2 months behind on your mortgage, or you are expecting you will be in a financial hard very soon, like during this crazy Coronavirus (Covit-19) Pandemic.
To get out from under a mortgage legally requires planning and approval from the lender. Aside from selling the house in Kent for less than it is worth and paying the bank the difference, here are 7 ways homeowners get out from under a mortgage legally.
1-Walking Away:
Some underwater homeowners just stop making payments, move away, and “give the keys back” to the bank. Wealthier homeowners who find folly in paying a mortgage worth more than the house, plan for alternative housing, and abandon the property. In some cases though, if homeowners advise the bank they wish to abandon the property, they may settle with a deed in lieu and return the property to the lender, or some sort of mortgage assistant program. Be careful when you work with one of them, I would highly recommend checking this article afterward, 2 pitfalls about mortgage assistant program.
2-Deed-in-lieu:
An alternative to a short sale is called Deed-in-Lieu of Foreclosure. Deeding your property to the lender in exchange for being forgiven the entire amount of the mortgage is called a deed in lieu of foreclosure. It essentially means you transfer ownership of your home to your lender. This is a more streamlined process than a foreclosure, and it may have less of a negative financial impact on you. The lender then sells the property and recoups a portion of the unpaid mortgage. If you have been late on your mortgage payments, your credit might be impacted, so make sure you communicate with the lender early!
Working with your bank or lender, with a Deed-in-Lieu arrangement, you’ll have time to plan your move and transition out of your home, might get some relocation assistance or might be able to stay in the property without paying for a short period of time, while the bank is working on all the logistic and paperwork.
3-Foreclosure:
When the bank does not get paid, they may file foreclosure on the homeowner, who is forced to leave after a court judgment. Timing varies, so many foreclosure victims are left with great uncertainly as to their futures. If they are also out of work, they may have difficulty finding shelter or place to rent if they wanted to because of the bad credit and ability to pay rent (plus secure deposit, first and last month Rents)
If you end up here, it might too late! I am sorry! You have just lost everything, including your equity in the house if any! Not only you are walking away with zero dollar and lost all your equity plus any down payment you had into the house, but also you will damage your credit significantly! Here are 5 equity killers to sell your house in Kent.
Many People have the misconception that the lender wants to take back your home through foreclosure. Untrue! The lender is most interested in ensuring the mortgage payments are made each month. Lenders only begin foreclosure when every other option has failed.
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4-Short sale:
A homeowner can ask the bank to accept less than the loan’s balance through a short sale. This is still damage your credit, but allows the owner more control over the sale. As widespread short sales become the norm for handling property that current owners cannot afford, the stigma and the impact on credit may diminish. With a short sale, the bank may try to hold the borrower liable for the difference between the mortgage value and the sale price.
After you talked to your lender, and both agree that a short sale is your best option, have your realtor start an application for a short sale at equator.com
You might need the following to avoid delay in the process since TIME is of the essence:
- Third-party authorization form that allows your agent to speak with the lender
- Listing agreement
- Hardship package such as hardship affidavit, 4506-T form to request Tax Transcript, and financial worksheet…
- NWMLS Listing
5-Rent out the house:
Those temporarily or expected to be in bad circumstances can rent out their home and live elsewhere until they can afford to live in the house again. Like Gerald in Bonny Lake, WA. This approach works well in areas where the rental property is in high demand and rents are substantial. The homeowner becomes a landlord, which changes the picture for both taxes and insurance. If considering this option, check with your insurance company and accountant, or do thorough math yourself or give us a call at (425) 272-9299. We are happy to walk you through some typical costs and pitfalls being a landlord!
6-Refinancing:
If it’s getting harder to make your payments but you haven’t fallen behind on your mortgage payment yet. You might have a simple, effective option: Refinancing your mortgage to one with a lower monthly payment. You can lower your monthly payment by 2 options: Longer-Term (like 30 or 40 years loan) or Lower the interest rate, or Both! Checkout today’s rate at Bankrate.com or go to our resource page to learn how to get the best deal on your mortgage or refinancing.
To refinance, your account might need to be current and you haven’t been late on your payments over a certain period, depending on the lender you are applying with. We have the rock star loan officers that financed and refinanced over 100’s properties for us at Angel Home Solution, you can call (425) 272-9299 to get the info if it is the right time for you! at today’s rate at the 3% mark, there couldn’t be a better time!
7-Sell to a company that buys houses:
Not all options will work for everyone. Maybe you won’t qualify or maybe you are better off not losing everything or giving your house away to the bank! You should find the best out of the worse options. Sell your house to a company that buys houses and get cash in your pocket in 7 to 14 days!
There are legitimate companies in business that buy homes to fix up and sell. This can be a fast way to eliminate your mortgage obligation. You receive a discounted amount for the house, but pay NO money out of pocket to sell it. This means:
- NO 6% real estate commission fees and
- NO renovation costs normally associated with preparing a home for showings.
- Since the process can be completed in a week or so, selling your home to a company that buys houses for cash allows you to beat a foreclosure filing, resolve an estate, or liquidate assets quickly.
- Allow you to SAVE on interest and late fee and other holding costs that kill your equity really quickly, and you don’t even aware of!
When you owe on a mortgage, you must settle with the bank in some way. Your goal should be to sell your house in a way that costs the least in cash and time.
If you couldn’t afford your mortgage, what would you do to get out from under it LEGALLY?