Getting behind on your Denver Home Loan may feel like the world is coming to an end, but it’s not. However, there are several things that you should not do if this occurs. First of all, you are in good company. Around 25% of homeowners are in some stage of delinquency or under water on their mortgage. In many cases due to circumstances beyond their control. Loss of income or reduction in pay, along with a myriad of other scenarios, has contributed to homeowners falling behind on payments on properties in Denver and across the nation. So what four things should you NOT do?
1. Do not ignore the situation. This seems to be the most common response for the majority of homeowners who find themselves in this situation, and it only makes matters worse. There are a number of options available and the sooner you check them out the more options you will have. The longer you wait the fewer options you will have to avoid a foreclosure. Foreclosure should never be an option, considering the damaging ramifications to credit, possible pursuit of collections, and difficulty of getting loans in the future.
2. If you are considering selling your home, do not let an interested buyer convince you to price it far below market value. Pay attention to what similar homes are selling for in your area. A slight reduction for the distressed situation you find yourself in may be in order, but your lender will not allow you to give the home away to a buyer who wants to steal it at a price that is way below market. Be wary of these type offers no matter what they are promising you.
3. Do not give a buyer wanting to make an offer on your property the authorization to negotiate directly with your lender. There is a good chance the buyer’s primary objective will be to get the lowest price possible for your property. This approach likely will not be in your best interest. If your Denver property is worth less than what is owed it might require your lender to accept less than the amount you owe on your home loan in a short sale approval. There are certain things that need to be negotiated properly on your behalf, such as guaranteed relief from any deficiency balance (the difference between what is owed and what the property sells for). This will not be the primary concern of the buyer trying to get a deal. An experienced short sale realtor will look out for your interests in the transaction. NEVER SIGN A CONTRACT WITHOUT THE ADVICE OF A PROFESSIONAL. Consult with an attorney or real estate professional. If the situation requires a short sale, the fee for the professional representation you receive will be paid by your lender.
4. Do not deed your Denver property to anyone without making certain the loan is paid in full. Until your lender has agreed to a short pay or transfer in writing you are the one on the hook for the unpaid balance. You do not want someone else having ownership interest while you are still on the hook for the loan.