4 Alternatives to Foreclosure
There are alternatives to foreclosure even if you haven’t been making your monthly mortgage payments. I know first hand how much it sucks to be in debt and in “over your head” on your house. You can read how I know here. But I didn’t foreclose. I got wise and caught up on every single missed payment. In fact I am in the process of refinancing after 1 year of 12 successful on time payments to the bank. It was a tough journey but I did it all because I realized something. There are alternatives to foreclosure and a short sale isn’t one of them.
Appeal Your Property Taxes
New Jersey property taxes are the highest in North America. I was paying nearly 15K yearly on a 2 family house. However, I was telling a good friend of mine my story and he said he appeals his property every single year. So, I researched it and found out that I had to prove to the court that houses in my area were selling (not foreclosing or short sale) for less than my assessed value. It was tough to find the comparables but a real estate friend of mine hooked me up. The end result? They lowered my assessed value $110,000. What a HUGE savings.
Tip – Appeal every year. Even if they don’t lower your taxes they won’t raise them either.
Get a Roommate
If you have an extra room or 2 in your house it my be time to make some new friends as you pay down some debt. I rented out each room in my home and used that money to get above water. Ideally I didn’t want to have to do it but sometimes you have to find alternatives to foreclosure. Getting a roommate is a great one. All I did was post some fancy ads (yes fancy) in Craigslist and interviewed some people. In the end I found some great fits for my lifestyle and home.
Tip – Make the ads nice so that you weed out the unwanted drifters.
Rent Out Your Garage
You aren’t going to get rich off of renting out your garage but it helped add payment to my mortgage. Here is what I did. I looked for someone who needed to store their car for an extended period of time. I interviewed him and learned that he had 5 cars in a 4 car driveway and wanted to park in a safe place. I have a gorgeous home so the fit was perfect. So, we made a deal and the car has been sitting there ever since. In fact to this day I have never physically seen him move it.
Tip – Put everything in writing. Timeframe, usage and access.
Add Your Spouse to the Deed
My credit was shot the day I missed a mortgage payment. I actually had given up and had no alternatives to foreclosure. Then one day I looked at my kids and realized that I didn’t want them to see me go through this. So, I did some research. A lawyer told me if I added my wife to my deed I could refinance under her name and save a lot of money. So, I used a connection I had with a title company and paid to put her on. Now we are both on the deed. We will save over $600 a month once all is said and done.
Tip – Use someone you trust. A spouse or a family member will help get your placed refinanced.
Do You Have Any Alternatives to Foreclosure?