Know Your Limits

When keeping your home doesn’t make sense

If you can’t afford any of the repayment options, you can still sell your home to avoid foreclosure. This will let you keep most of the equity you’ve built in your house and save your credit score. Remember, foreclosure stays on your history forever.

Here’s what you can do:

Deed-in-lieu (DIL)
This is when you agree to give ownership of your house to someone. This means you are free of all obligations to keep paying your mortgage. The new person then takes over your mortgage payments. This is also called an assumption.

Short sale payoff
You can sell your home before it goes to foreclosure. Your lender will count this as payback of your debt. Plus, you can sometimes make profit on the sale to help you buy a new home that you can actually afford.