Is Your Mortgage Underwater? You Have Options

Buying a home will generally be the most expensive purchase anyone makes in their lifetime. The housing market demands hundreds of thousands of dollars in mortgage loans to fulfill the American dream of owning a home. Of course, this means you assume a massive debt the day you sign your mortgage.

Between this massive debt and an unpredictable economy, people understandably fall behind on their mortgage payments. Sometimes there is a simple fix like making an additional payment when you have the funds, but other times you end up in what feels like an insurmountable position. We’re here to tell you that you have options.

Refinance or get a loan modification

If the terms of your mortgage are overwhelming – change them! Okay, it’s not that simple, but you may be able to get out of the hole simply by working with your lender or another lender to find more favorable terms.

In refinancing your loan, you are agreeing to a new loan that will cover the balance of your previous mortgage but hold new terms. This could include a lower interest rate, longer loan repayment, or other terms that allow you to lower your monthly payment.

Under a loan modification, you work with your current lender to find terms that allow you to continue to pay your loan without as much of a burden. If your credit has improved since you first signed the mortgage then you may be able to secure a better interest rate which ultimately matters more than any other element of your loan (other than the length, of course).


If you know you are only dealing with a temporary financial hardship then forbearance is likely your best choice. This pauses your loan temporarily which allows you to get back on track without falling further behind or having it impact your credit.

Your record will show that you are current on your mortgage and you will eventually resume repayment through either installments as you were already paying or through a lump sum to pay off whatever is past due.

Short sale or foreclosure

These two options are extremes that some homeowners face when there is no clear end in sight. They do take the burden of repaying your loan off your shoulders, but they aren’t ideal for your financial picture.

In a short sale, you are voluntarily selling your home at a price short of the remaining balance of your mortgage. With approval from your lender, you would find a buyer to pay the highest price you can get for your home and give that money to the mortgage company to cover as much of the balance as possible. Unfortunately, you will still be responsible for the difference between the sale price and the remaining balance on your current mortgage unless your lender forgives the difference. Thankfully, a short sale has a limited impact on your credit so you may be able to get a new mortgage on a separate property in relatively short order.

In a foreclosure, the opposite is taking place. Instead of you making the choice to sell the home, the lender is choosing to take legal action to assume ownership of the home. You will be notified and given a chance to respond/remedy the situation, but the lender will be permitted to sell the home if the court approves the foreclosure. This means you would be forced out of your home and suffer a severe hit on your credit score.

At the Law Office of Ray Garcia, we take pride in helping clients choose the best options for their finances and their families. Our goal is to help you get out from under a burdensome mortgage without having to face foreclosure. Contact our team if you are overwhelmed by your mortgage and need a sensible way out.

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Law Office of Ray Garcia, P.A.

Our mission is to provide our clients with legal services that not only meet their needs but exceed their expectations. We approach all practice areas with care, knowledge, experience, and determination. Trusted In South Florida For Decades.

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