There are many options for homeowners who are struggling with their mortgage payments. Fannie Mae recently published a list of detailing some of the options that may be available.
A new loan — with new terms, interest rates and monthly payments — that completely replaces your current mortgage. Even if your home value has decreased, you may be able to refinance your loan as part of the government’s Home Affordable Refinance Program (HARP).
Make your payment more affordable by lowering your interest rate or adjusting the terms of your loan No negative impact to credit score Stay in your home and avoid foreclosure
An agreement between you and your mortgage company that lets you pay the past due amount on your mortgage payments over a specified time period in order to bring your mortgage up to date.
Repayment plan benefits:
Catch up on your past due payments over an extended period of time Less damaging to your credit score than a foreclosure Stay in your home and avoid foreclosure
An offer by your mortgage company to temporarily suspend or reduce your monthly mortgage payments for a specified period of time.
Have time to improve your financial situation and get back on your feet Less damaging to your credit score than a foreclosure Stay in your home and avoid foreclosure
An agreement between you and your mortgage company to change the original terms of your mortgage—such as payment amount, length of loan, etc. You may be eligible for the government’s Home Affordable Modification Program (HAMP) created to help struggling homeowners.
May reduce your monthly mortgage payments to a more affordable amount Less damaging to your credit score than a foreclosure Stay in your home and avoid foreclosure
A short sale is the sale of a home for less than the balance remaining on your mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off your mortgage balance with the proceeds.
Short sale benefits:
Eliminate or reduce your mortgage debt Assistance for relocation may be available May be able to recover your credit score—and get another mortgage—faster than if you went through foreclosure
A new program that allows you to temporarily lease your home. You first transfer the ownership of your home to the mortgage company (called a Deed-in-Lieu of Foreclosure, see below) in exchange for release from your mortgage loan and payments. You can then rent the property back—at an affordable rate—and remain in the home as a tenant.
Stay in your home and neighborhood—no need to move or relocate May be able to recover your credit score faster than if you went through foreclosure Assistance for relocation may be available at the end of your lease Avoid foreclosure
Deed-in-Lieu of Foreclosure:
With a Deed-in-Lieu of Foreclosure (DIL), transfer the ownership of your property to your mortgage company in exchange for a release from your mortgage loan and payments.
Eliminate or reduce your mortgage debt May be eligible for relocation assistance May be able to recover your credit score—and get another mortgage—faster than if you went through foreclosure