How to Navigate Mortgage Delinquency: Options to Keep or Sell Your Home in Kansas City

Are you falling behind on your mortgage payments? This situation can be overwhelming, but there are multiple options available to help you get back on track and avoid foreclosure. Whether you aim to keep your home or need to consider selling it, this guide will educate you on the best steps to take.

Buying Time and Catching Up on Payments when You Are Behind

Communicate with Your Lender

The first and most crucial step is to contact your lender. Explain your situation honestly and ask about available options. Lenders are often willing to work with you to avoid foreclosure and will even provide you with much more information than what we have here in this article.

Resource: Fannie Mae’s Avoid Foreclosure Guide

Forbearance

Forbearance allows you to temporarily suspend or reduce your mortgage payments. This can provide immediate relief and buy you time to improve your financial situation.

• Pros: Short-term financial relief, avoids foreclosure
• Cons: Deferred payments will need to be repaid, potentially higher future payments

Loan Modification

A loan modification involves changing the terms of your loan, such as extending the term or reducing the interest rate. This can lower your monthly payments and make them more manageable.

Refinancing

Refinancing your mortgage can also lower your monthly payments by securing a new loan with better terms. Ensure you meet the qualification criteria and understand the costs involved.

Although if financed your home when the interest rates were in the 2s and 3s, today’s rates may not be affordable.

Seeking Professional Help

Housing counselors and financial advisors can provide valuable guidance tailored to your situation. Utilize resources available in Kansas City to make informed decisions.

Resource: US Department of Housing and Urban Development’s Avoid Foreclosure Page

Selling Your Home When You Have Equity to Avoid Foreclosure

Traditional Sale

Selling your home traditionally involves listing it with a real estate agent. This process can help you get the best market price for your property.

• Steps:
  • Prepare your home for sale
  • Price it correctly
  • Work with a real estate agent to market and sell your home

But keep in mind with this route you will have some time invested in getting it ready, getting it marketed and finding a buyer. Then you will have appraisals and inspections, which often result in the seller needing to make costly repairs. And after it is all said and done you will need to pay the real estate agents involved which can be 3 to 8% of the purchase price.

Selling to an Investor

Selling to a real estate investor can be quicker and involves fewer contingencies. This option can be ideal if you need to sell your home fast.

• Benefits:
  • Quick sales process
  • Less hassle
  • Fewer contingencies
  • No Repairs
  • No Commissions
  • Saves Time

But remember to do your homework when selling to an investor. Many out there are brand new to the business and don’t have a way to buy your house. Instead, they are getting it under contract so they can resell it to another investor. Here at kcmoHomeBuyer, the Tuckers are local, have the funds, and close . . . and we’ve been doing this since 2000 so we know a thing or two about buying houses.

FSBO (For Sale By Owner)

Selling your home yourself can save on commission fees but requires more effort on your part. Ensure you understand the market and are prepared for the process.

Creative Sale Options When You Owe Too Much

Short Sale

A short sale involves selling your home for less than you owe on your mortgage. This option requires lender approval but can help you avoid foreclosure.

• Impacts:
  • Credit Implications
  • Possible tax implications

Selling Subject To Existing Financing

In a “subject to” sale, the buyer takes over the existing mortgage payments without formally assuming the loan. This can be a viable option if you owe more than your home is worth.

• Risks and Benefits:
  • Transfer of ownership without paying off the mortgage
  • Potential risks for both seller and buyer

Deed in Lieu of Foreclosure

This option involves transferring the property deed to the lender to avoid foreclosure. It has its pros and cons and should be considered carefully. Be sure to consult with your attorney as you could still owe on the loan, even after deeding the house back.

Rent-to-Own Agreements

A rent-to-own agreement allows a potential buyer to rent your home with the option to purchase it later. This can provide immediate cash flow and a potential sale in the future.

Let Us Help

If you’re behind on your mortgage payments, it’s crucial to take action quickly. Explore all your options, seek professional advice, and choose the best path for your situation.

If selling your house is your best option, we can help. Visit our How Our Process Works page to learn more about how we can assist you. Don’t wait—tell us about your house today and take the first step towards resolving your mortgage challenges.