If Keeping Your Home Is Not an Option
Options to Relinquish Your Home
If keeping your home is no longer an option, call your lender immediately. Your options may include:
- Sale: If you can no longer afford your home, your lender will usually agree to give you a specific amount of time to find a purchaser and pay off the total amount owed. You will be expected to obtain the services of a real estate professional who can aggressively market the property.
- Pre-Foreclosure Sale or Short Payoff: If the property’s sale value is not enough to pay the loan in full, your lender may be able to accept less than the full amount owed. This option can also include a period of time to allow your real estate agent to market the property and find a qualified buyer. Monetary help may also be available to pay other lienholders and/or help toward paying a few moving costs.
- Assumption: A qualified buyer may be allowed to assume your mortgage, even if your original loan documents state that it is non-assumable.
- Deed-in-lieu: Your lender may agree to allow you to voluntarily give back your property and forgive the debt. Although this option sounds like the easiest way out for you, generally you must attempt to sell the home for its fair market value for at least 90 days before the lender will consider this option. Also, this option may not be available if you have other liens, such as judgments or other creditors, second mortgages, and IRS or state tax liens.