What to do when you can’t af­ford to fix your home

Sun Sentinel Broward Edition - Homespot - Broward East - - LIVING G SPACE - By Ilyce Glink and Sa­muel J. Tamkin

Tri­bune Con­tent Agency Q: I’ve never been

late with my pay­ments. Bank of America has my loan. I’m won­der­ing if I can ben­e­fit from a HAMP or a HARP loan. My house is lit­er­ally fall­ing apart, but I can’t af­ford to fix the roof, foun­da­tion or ter­mite prob­lem. Should I sell the prop­erty as a flip/fix to a real es­tate agent? A:

The first ques­tion is whether you have eq­uity in your house or not. If you do, then you might be able to get a home eq­uity line of credit to help cover some or all of the ex­pense in fix­ing your home. If there is no eq­uity and you can’t fig­ure out how else to pay for the needed re­pairs, then you should con­sider sell­ing this prop­erty be­fore it falls down around you.

The pro­gram that might be help­ful to you is the Home Af­ford­able Re­fi­nance Pro­gram (or HARP), which would help you re­fi­nance your mort­gage. But you’d only do this if you have a high in­ter­est rate and very lit­tle or no eq­uity. While a HARP loan would make re­pay­ment eas­ier (be­cause it would lower your in­ter­est rate), it wouldn’t give you any cash to fix up the prop­erty.

It’s not that easy to qual­ify for a HARP loan, de­spite what you may have heard. First, your loan must be owned by Fan­nie Mae or Fred­die Mac. (If Bank of America is the ser­vicer, then it’s likely that your loan is owned by Fan­nie or Fred­die.) Your loan has to have been orig­i­nated on or be­fore May 31, 2009. And your loan-to-value ra­tio must be greater than 80 per­cent. You can find out more at harp.gov/el­i­gi­bil­ity.

If you can’t qual­ify for a HARP re­fi­nance or a con­ven­tional re­fi­nance, then you should think about list­ing this prop­erty be­fore any more value slips away. Please talk to a hand­ful of real es­tate agents who are fa­mil­iar with the neigh­bor­hood, and who work for bro­ker­age firms that do a lot of busi­ness in your neigh­bor­hood. If you don’t know good agents in the neigh­bor­hood, call up the com­pa­nies that work there, talk to the man­ag­ing bro­ker about your sit­u­a­tion and ask for a rec­om­men­da­tion. Then, in­ter­view those agents to find some­one you can re­ally con­nect with.

Use on­line tools like Zil­low, Tru­lia, Ilyce’s YouTube chan­nel (youtube.com/ Ex­pertRealEs­tateTips) and her web­site (ThinkGlink. com) to ed­u­cate your­self on the prospects and what the sales sit­u­a­tion looks like in your neigh­bor­hood right now.

Once you have that in­for­ma­tion, you may find that you need to sell the home as a short sale — that is where you owe your lender more than what you will get out of the sale of the home. If this is the case, you may want to con­tact the lender early in the process and see what re­quire­ments the lender will have for your short sale. (The lender has to ap­prove a short sale and that ap­proval process can take a long time.)

Short sales are not al­ways easy, but if you take some time and talk to your lender now, you might get a bet­ter idea how hard it will be for you to sell it to a prospec­tive buyer.

Ilyce Glink is the cre­ator of an 18-part we­bi­nar and ebook se­ries called “The In­ten­tional In­vestor: How to be wildly suc­cess­ful in real es­tate,” as well as the au­thor of many books on real es­tate. She also of­fers in­for­ma­tion on her YouTube chan­nel. (youtube.com/ user/Ex­pertRealEs­tateTips).

Con­tact Ilyce and Sam through her web­site, ThinkGlink.com.

© 2015 Ilyce R. Glink and Sa­muel J. Tamkin. Dis­trib­uted by Tri­bune Con­tent Agency, LLC.

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