Understanding options to leave your home

If homeownership is no longer affordable, there are options to help you exit your home without facing the costly impacts of foreclosure.

A foreclosure on your home can be devastating – financially and emotionally. If you’ve worked with your loan servicer (the company listed on your mortgage statement) and determined that you don’t qualify for a modification or alternative to stay in your home, or you’ve decided you no longer want to live in your home, don’t give up.

There are additional options you may have to exit gracefully from your home, including selling with equity, a short sale or deed-in-lieu. Reach out to your loan servicer to discuss whether one of these options may be available to you.

Selling with Equity

This is an option if you have equity in your home — that is, when your home’s value is greater than what you owe on your mortgage, plus any other debts secured by your home. Selling with equity allows you to use the proceeds to pay off your remaining mortgage debt, while keeping the excess funds from the sale. For more information about the process and costs of selling your home, see Selling your home.

Short Sale

This is an option to sell your house for an amount less than the full amount you owe, and your lender agrees to a "short payoff".

Deed-in-lieu

This allows you to voluntarily transfer the title of your home to the owner of your home loan. Usually you must try to sell your home for its fair market value before the mortgage company will consider a deed-in-lieu.

Assumption

If your loan servicer is agreeable, a loan assumption permits another qualified buyer to take over your mortgage debt and the mortgage payments, even if the mortgage was originally non-assumable.

Unfortunately, during times of hardship people are often targeted by fraud artists. Learn how to recognize and steer clear of scams and financial traps.

There should never be a fee from your mortgage company or HUD-certified housing counselor to obtain assistance about options to help you avoid foreclosure. Be wary of companies or individuals offering to help you for a fee, and never send a mortgage payment to any company other than the one listed on your monthly mortgage statement. If you believe you’ve been the victim of a mortgage scam, call 1-888-995‐HOPE (4673) and report it immediately.