Upside Down Mortgage Options in Atlanta

Many people are finding themselves in a negative equity situation, this means they owe more on their home than it is worth. There are loan programs one can apply for set up by the government that are worth investigating for an upside down mortgage – what your options are. Negative equity is not a problem on it’s own for those who can afford their mortgage and have a good loan, they can wait until the market settles down and their values improve.

For those with risky loans, such as interest only or ARM’s, negative equity is a bigger issue. It can affect their ability to refinance to a more stable loan product. It can also require them to sell their home.

If the decision has been made to stay with the current loan, they should maintain the property. This will insure an easier sale when the property values increase if one chooses to sell at that time. Another option is to speak to the bank and request the terms of the loan be renegotiated to a lower interest rate. Many banks will do this as they do not want a foreclosed property that will be hard to them to sell.

Some options in loan plans are the Freddie Mac Relief Refinance Mortgage to refinance one into a fixed rate with a loan to value ration of 125 percent. There is the Fannie Mae Refi Plus that is similar to the Freddie Mac but it is for existing Fannie Mae loans and the FHA Insured No Appraisal Streamline Refi for homeowners with good payment histories who can refinance their FHA loan to a lower rate without employment verification or an appraisal.

Another option is the deed in lieu of foreclosure which returns the deed to the lender to prevent foreclosure. This can be risky and one should research this thoroughly before proceeding.

One can rent the house out. There are many people looking for property to rent and it can provide the opportunity to keep the house and have someone else cover the payments every month. Tenants must be chosen carefully so as not to create more problems, they should be financially sound and responsible. Renting out the house and moving to a less expensive one saves money. One can also rent out rooms if it is a big house.

A short sale will need to be approved by the lender in order to proceed with it. This is when the property is sold at a value that is lower than its mortgage balance and is done if the owner cannot afford to keep it. When he house is sold the mortgage company receives the money from the sale and writes off the balance of the loan, they might expect one to pay the balance as well. This is a good option as it absolves the owner from owing anything, the borrower will suffer credit damage but it is far less that the damage from a foreclosure.

When proceeding with a short sale, ask the lender as part of the negotiation if they will not report any adverse credit to the credit reporting agencies. The lender is not obligated to do this, credit report status is not always up for negotiation but it it worth asking about to save ones credit rating. These are some of the things to consider when one has an upside down mortgage – what your options are.