Many homeowners have more than one house, either for rental or for a vacation home in addition to their personal residence. So when money gets tight, it gets really tight if there are multiple mortgages to pay. One way out of a sticky financial spot regarding house payments is to modify the mortgage. A lot of people do this for their personal residence, but become concerned as to whether doing so also allows them to modify a mortgage on a second home.
Modifying a mortgage on a rental or second property is possible, you just need to know what steps to take and if there are other options that may better suit your needs. As with a modification of the mortgage on your principle residence, a modification of the mortgage on a second home requires an application be filled out and documents submitted to the lender. The process is the same, with the lender reviewing the documents provided and sending the request to an underwriting team for review. If you have hesitation over modifying a second home mortgage, consider these options:
- File for bankruptcy. If you are realistically not going to rent out a second home or no longer use it as a vacation spot, bankruptcy will alleviate the need to continue paying the mortgage.
- Offer a deed in lieu of foreclosure to the lender. This requires you to sign certain documents putting title back in the name of the bank, and can be done without the need to file a bankruptcy as long as your lender agrees to accept the deed.
- Consider a short sale of the property, which also requires lender approval. A short sale is a sale of the home for less than what is owed, but for an amount the bank will accept.
These options; bankruptcy, short sales, and deeds in lieu all require the assistance of a trained legal professional. When tying up loose ends on frayed finances it always best to place the matter in the hands of a trusted debt management attorney. It might also be possible to consolidate or refinance your debt, and talking over your personal needs will give you insight as to which path to take.
If you have more questions about debt and mortgage modifications, contact us at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.