What is a Strategic Foreclosure?

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<h1>What is a Strategic Foreclosure?</h1><strong> Author: <a href='http://www.articleseen.com/profile_Christy Thompson.aspx'>Christy Thompson</a></strong><br /><p>Strategic foreclosure is when you have taken the steps…and I used the example earlier. You have purchased a home for $300,000 and you come to realize that your property is worth less than $150,000. So you’re facing negative equity for probably over a decade at that amount. To be brutally honest at that point you truly are just renting. You’re not paying down that mortgage. You may be paying down that debt, but you certainly are not affecting the value of the property. And you won’t be seeing any equity in that property. So once you’ve come to that conclusion, if you decide to allow the property to go into foreclosure, you really should be smart about how you use those mortgage funds. If they’re not going to go to the mortgage, apply them to other debt. Start using the fact that you’re going to be residing in the house for about six months. Because in foreclosure, within 90 days of not making your payments, you’ll receive a letter from your lender that lets you know that the property is going to be sold in another 90 days if you don’t become current on the payments. So you have six months to reside in that house. Say if your mortgage payment was $1000 a month, there’s $6000. Take that money, set it aside for a property (a rental property that you’re going to be residing in), but also use it to pay off other debt. Contact your creditors. Contact your credit card companies at the time that you decide that you’re going to stop paying your mortgage. What you’re going to do is ask them to lower your interest rates and to raise the available credit that you have. The reason that you’re going to do that is foreclosure is bad for your credit. You can’t help that fact. This is a financial decision. You’re getting rid of one debt in order to hope to acquire better debt in the future. So, if you use your house payment to apply towards other debt, you will come out of it with lower debt. And, if you’re smart about paying those credit cards every single month and paying them off, you won’t necessarily remove the foreclosure from your credit. But at least you’ll offset some of the problems that can cause. Maintain your credit in your foreclosure. That’s really what a strategic foreclosure is about is to not simple spend those mortgage funds without any thought of where they’re being spent at. Be very conscious of how you spend it, where you spend it, and get your best financial bargain for being able to live in the home for six months. That’s really what a strategic foreclosure comes down to is being smart with your money during this process.</p><strong>About the Author:</strong><br />To get additional information on debt settlement and bankruptcy options please visit our web site. We would also like to offer you a free online debt evaluation. You can claim your free online debt evaluation at <a rel="nofollow" href="http://arizonalegaladvocacy.com"> http://arizonalegaladvocacy.com</a>. <b>Christy Thompson</b>, your <a rel="nofollow" href="http://arizonalegaladvocacy.com"> Chandler Bankruptcy Lawyer</a>.<p> Article Source: <a href='http://www.articleseen.com/Article_What-is-a-Strategic-Foreclosure_45872.aspx'> http://www.articleseen.com/Article_What is a Strategic Foreclosure?_45872.aspx</a></p>

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Category : Finance : Mortgage