Looking down the barrel of a foreclosure, if you are among one of the over 1.4 million homeowners facing this same issue, there may be a creative technique to save your home. Save your home and equity so that you can try again. The last thing that you want to do is give your home back to the financier.
If your financial hardship has left you in a position whereby you are not able to pay your mortgage payment, whatever the reason may be, then you cannot afford to live in your home. Foreclosures are raising a dilemma for most homeowners in the United States as of today; foreclosures are at an all-time high. Alan Greenspan has made comments that the US may be heading for a recession in 2008.
Some lenders out there have not been playing fair, and some even to the point of unethical practices. These corrupt practices are the main reason for foreclosures that are at an all-time high and not predictable to slow in 2008, from what most professionals have believed.
On the positive side, you may have a choice that may let you save your home, though the foreclosure procedure is already in progress. Something that has been around for several years, and you may likely use to save your equity and home. You may have to wait a year or two so as to cash out the equity on the property, but it is better than the others.
This option is referred to as a Lease Purchase Agreement, find a tenant to lease your home from you, with an option to purchase the home at the end to the agreed period of time; usually 12 to 24 months. You set a price for them to buy the house when the agreement is signed; this will allow you to set the price so you can save the equity and by some time to recover. With a renter that has the choice to buy your home you may be able to:
1) Firstly is the prevention of a foreclosure
2) Because renters are paying less today due to the increase in foreclosure rates, this may be a way to increase the monthly rent, due in light of the buying agreement
3) A one-time payment, up-front as a non-refundable deposit, this is usually 1% - 3% of the sales price. The best part of this is that even if they decide not to buy your home, you still keep the money
4) Swiftly locate a buyer for your property; most times faster than trying to sell your home in the traditional manner
5) Someone else will be paying the mortgage payment and potentially a few hundred dollars a month more
Lease Purchase Agreements typically work well in any real estate market; this agreement means a "lease option" also. This is a very valued strategy to remember, particularly during a market that in a distress.
While there may be several other reasons to take advantage of a lease option, they are definitely a brilliant way to avoid foreclosure and salvage your home from the bank. In a foreclosure, your credit will be ruined for years to come, and the extra financial consequences can take a toll on your own life.