More and more distressed homeowners can start fresh as banks try to keep foreclosures off the market. It’s called artificially driving demand but it works, and now many sellers can rest assured that they will get a good price for their home. Therefore, we have some tips on how distressed homeowners can start fresh too.
How distressed homeowners can start with a fresh slate:
Sell and get out – For homeowners who have saved and scrimped to get through the recession, the current market may present a better opportunity. You can sell or short sale your property to get out of your rut. And, now that the economy is beginning to turn around, you may not be as upside down on your mortgage as you once were. Banks are moving short sales quickly and efficiently now. The income tax exemption on debt forgiveness on short sales will also be valid through the end of the year.
Settle old scores – If you had to foreclose on your home that had a second mortgage, you could still owe a lingering debt. However, many second mortgage holders are not actively collecting debts, but that debt will stay on your credit score until paid. Therefore, you should contact the servicer of your second mortgage and see if they will settle with a lower payment. Be sure to check your credit score once you pay off the debit to make sure it is no longer showing up as delinquent.
Dispute expired derogatories – If you foreclosed on your property in 2005 or 2006, your credit report will need to be checked to make sure the expired debt has been removed. If the seven year time frame has run out and the debt is still on your credit, you can have it disputed to have it removed.
Lock in low rates with refinance – Many homeowners lost the value of their homes during the recession and if you were one of them you can refinance your home to take advantage of the lower rates. Now is a great time to save on your monthly payment.