Playing Catch Up: What To Do If You’re Behind on Mortgage Payments


Falling behind on mortgage payments can be a frightening situation. You don’t want to lose your home, but you know that if you can’t meet your obligations, that becomes a real possibility.

Mortgage delinquencies are down overall, but all it takes is an unexpected emergency, government shutdown or natural disaster to throw your finances into chaos.

If you find yourself among those teetering on falling behind on your mortgage payments, there are steps you can take to stay in your home. Read on to find out what they are.

Take a Close Look at Your Financial Situation

You need to sit down and take an honest look at your finances. Assess whether or not this is a temporary situation or a long-term situation. About 40% of Americans can’t cover a $400 emergency, which makes it more likely that people will face this type of situation.

For example, if you lost your job, how quickly do you think you’ll be able to get a new job? In the case where you see a drop in income, look to see where you can trim down other expenses.

The reason why this is important is that when you talk to your lender, you want to provide them with information about your income and your situation. They’ll help you find a solution that works.

Sell Your Home for Cash

One other option is to sell your home for cash. You can use the proceeds from the sale to pay off the mortgage on your home, leaving you free and clear to start over.

When you sell your home for cash, you’ll get a less than the full value of your home. That’s mostly because you can get cash for your home in as little as 7 days.

You’re paying for speed, but when you’re in a situation where you need to catch up on mortgage payments, it’s well worth it.

Plus, there’s no hassle dealing with real estate agents and potential buyers coming in wanting to see them home. It’s a great solution if you’re in a position where you can’t wait for a home to close.

File for Bankruptcy

Filing for bankruptcy should be your absolute last resort. It doesn’t stop the foreclosure process, but can keep you in your home a little longer and give you a chance to catch up on your mortgage payments.

This is should be considered a “nuclear option,” since bankruptcy will stay on your credit report for 10 years. That will impact your ability to get loans in the future.

Solutions for Falling Behind on Mortgage Payments

With every problem comes a solution. It’s the same with your mortgage payments. You want to make sure that if you are close to falling behind on mortgage payments, you have plenty of options available to you.

If you find yourself in a situation where you’re behind on your mortgage, we can help. Contact us today to find out more about selling your home for cash.

Understanding Your Options During the Foreclosure Process


1 out of every 200 homes falls victim to foreclosure. That’s according to numbers compiled by the FDIC.

The foreclosure process can be scary, but it doesn’t mean you should panic. You should treat it like a serious matter, of course. But you should also look at all your available options.

What happens when your house is foreclosed? First of all, it takes a few months. You won’t have a home one day and be out on the street with no warning the next day.

Read on for all the information you need to know about what happens when your house is foreclosed.

How the Foreclosure Process Starts

The foreclosure process begins when a homeowner stops paying their mortgage. It doesn’t begin after a single missed payment though.

In general, a mortgage foreclosure won’t begin until you’re at least three months behind on your house payments.

If you’re wondering why people don’t just make their payments, it’s not because they forgot. On a similar note, no one is sitting around their house and thinking, “I could pay the mortgage, but what’s in it for me?”

People facing foreclosure are almost always in dire financial straits. They may have lost a job. Perhaps a family member died and they can’t pay the bills anymore.

A few years ago during the housing market bust, some homeowners performed what’s known as a strategic default. But even that is often an act of desperation.

The lender will give the homeowner some time. But after a few months, they’ll file a notice with the local government. This is sometimes known as a notice of default.

Pre-Foreclosure and Short Sales

For the homeowner who comes home to a foreclosure notice on their front door, it can feel like the timeline suddenly speeds up. But even then, they still have a grace period.

The grace period gives them time to work out an agreement with their lender. In some cases, the homeowner will be able to pay what they owe. But in other cases, a short sale is the best option.

A short sale is often confused with selling your home for cash. They’re not the same thing.

A cash sale means you don’t involve real estate agents or anyone else. When the buyer pays you, you keep 100 percent of the sale price. But you still owe the remaining balance on your mortgage.

Short sales happen during pre-foreclosure. It’s a way for the lender to get back some, but not all, of their loan.

Let’s say you bought a house for $400,000. A few years later, you still owe $325,000, but the house’s value has plummeted to $275,000.

In a short sale, the bank would agree to accept a sale price of $275,000 to settle the debt.

It doesn’t always work. But when it does, it can be an effective way for both the lender and homeowner to avoid a foreclosure auction.

Avoiding a Foreclosure

Going through the foreclosure process means living with a near-constant sense of dread. You may feel like you’ve failed.

But you haven’t failed, and you can’t give up. You still have certain rights. The bank might not mention them, but they do exist.

We can help you avoid foreclosure. Contact us today to find out how.

Are You Penalized for Your Profit? Understanding Capital Gains Tax on Inherited Property


It’s been estimated that between 2007 and 2061, nearly 93.6 million Americans will inherit roughly $59 trillion. Of that whopping $59 trillion, a portion of it includes property.

For those fortunate enough to receive an inheritance in the form of a home, you’ll probably think about selling it. However, there will be at least one issue nagging at you. You’ll wonder if Uncle Sam will have his hand in your profit.

If you keep reading, we’ll help you understand if you actually have to pay a capital gains tax on inherited property.

Exactly What Is a Capital Gains Tax?

Simply put, a capital gains tax is the small price you pay to the federal government whenever you sell property of significant value, i.e. a home, for more than you paid for it. Essentially, it’s a tax on the profit you make.

Since we are talking about inherited homes here, the recipient of an inherited home clearly hasn’t paid anything for the property. As such is the case, the government uses the valuation of the home at the time a person inherits the property as the starting point, and what the property eventually sells for to determine the actual profit.

So Will You Have to Poooay Capital Gains Tax on Your Inherited Property?

While it does depend on several factors, there’s a good chance you will wind up owing Uncle Sam something by way of a capital gains tax.

Besides looking at the profit you earn, the government will also look at your tax bracket, your marital status in terms of how you file your taxes, and how long you’ve owned the property.

Say, for example, you’re single with a taxable income around $68,000 a year, and you inherit a house in Nassau County valued at $395,000. If you sell it within a year for $415,000, you’re looking at an estimated capital gains tax as high as $4,400.

In another example, if all of the variables are the same except you’re married filing a joint tax return with a taxable income around $130,000, you’d still be looking at a capital gains tax as high as $4,400.

Are There Ways to Legally Avoid Paying Capital Gains Tax on Inherited Property?

America wouldn’t be America without its loopholes in the tax code. Should you inherit a home and decide to make it your primary residence for at least two years, then you’re looking at an exemption from the capital gains tax—that is, provided you don’t profit more than a set amount and haven’t taken advantage of a previous capital gains exemption for another property within a two-year window.

So You Still Consider Selling If You Have to Pay a Capital Gains Tax?

While the prospect of paying a capital gains tax on inherited property may seem daunting, don’t let it scare you into not selling. When you add up the costs for keeping a house you don’t plan on living in or think about the hassle of converting a home into a rental property, you’ll quickly realize selling is still a great option.

And when you’re looking to sell, make sure you contact us. We can deliver you a cash check for your home within seven days.

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