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Homeowners facing foreclosures often find it hard to let go of their houses. But if you are one of them, you have an option of renting your home when you cannot sell it. Once you fail to make your mortgage payments, you can find tenants to rent your home and use their rental fee to pay your mortgage obligations.

Here are the pieces of advice experts share in renting your home:

• Get the similar feeling of selling your home as you decide on renting out your home.
• Screen all your tenants. Do not assume you will get the best tenants. There are some tenants who are scammers. For example, after giving a deposit, they will not pay rent anymore since they know you do not know how to evict them.
• Familiarize yourself with the law. Several laws apply to tenants’ protection and these laws vary among states. Therefore, you must base your rental agreements to the rules of the state where your home lies. Such laws can be found on the website of the Landlord Protection Agency.
• Set the right price for your rental fee. You can consult real estate agents in determining the best price possible. They can show you around to other homes, which are your competition.
• Leave your home furnished so you could charge greater rental fee.
• Make sure you make the right collections: sufficient deposit, pet deposit, additional charges for qualified reasons.
• You must repair damages or remove hazards from your home. However, a request of the tenant for any upgrades is not a requirement. You can allow upgrades that the tenant is willing to pay for.

Renting saves a house facing foreclosure, whenever selling is not considered by a distressed homeowner. It may be a bit of a risky process but for as long as it is well-researched and well-planned, then it can be a successful endeavor.

Millions of homeowners are struggling to meet their mortgage obligations and exploring solutions that could help them keep foreclosure at bay. Sadly, it has become more and more difficult for these homeowners since most of them has “upside down” mortgage and basically, disqualifies them from qualifying for most bailout plans.

For instance, the refinancing program “Save the Dream” of Michigan Governor Jennifer Granholm was launched last April to provide assistance to troubled borrowers. Out of the 135 calls received, only four were qualified.

Such dismal statistics is certainly frustrating for both homeowners and housing advocates. Many are crossing their fingers for Hope for Homeowners, the latest government offering to meet the public’s expectations.

Another federal program, FHA Secure from the US Department of Housing and Urban Development, was considered to be a failure since most of the applicants did not qualify. The requirements were simply too strict and too specific, almost automatically disqualifying homeowners who require assistance the most.

Two reasons can be cited for the disqualification of majority of the homeowners. One is having no equity left on their distressed properties and another is missing too many mortgage payments. In most cases, zero or even negative equity means owing more in mortgage debt than what the property is currently valued at.

For the government programs to work, housing counselors and mortgage brokers believe that lenders require more assistance in the form of staff in order to process more work out plans. The good news is that most lenders have finally looked at the problem at a different light and have become more willing to negotiate.

Aside from this, it is also vital that mortgage guidelines become more reasonable, allowing more time for homeowners to work out their mortgage payment problems especially if they have good credit scores.

In some states, new foreclosure laws that will give troubled borrowers as much as 90 days to negotiate with their lenders before a foreclosure case can be filed, have been approved.

With more and more homeowners facing foreclosure nationwide, the short sale transaction is increasingly becoming popular for those who can not refinance their existing mortgages and are having a hard time looking for a buyer who will agree to their asking price.

Although a short sale will allow a distressed homeowner to avoid foreclosure, there is still considerable damage on the credit. In order for you to determine if you can live with them, here are the things you should expect from a short sale.

Credit Score

For many experts, the losses you will incur in terms of credit points from a short sale transaction are almost the same as an actual foreclosure. You can actually lose as much as 300 points. This means that if you have a FICO score of 700, you will be left with just 400. In the United States, it is very important for you to have a high credit score as it is a testament to your paying credibility. Those with high credit scores usually enjoy lower interest rate when they take out a loan.

Credibility

When you choose a short sale transaction, it will come up in your credit report as “pre-foreclosure in redemption status”. Although it sounds better than a “foreclosure” entry, you will still have to live with the fact that it is still a negative entry that can damage your financial reputation.

Waiting Period

This is perhaps the only advantage that a short sale has over a foreclosure. Instead of waiting for as long as 6 years – typical for a foreclosure victim – before you are qualified to buy a repossessed home at an acceptable interest rate, a short sale will only mean two years of waiting.

You must also remember that some short sale transactions will require you to settle the difference between the proceeds of the sale and the loan amount, depending on the state you are living in. To be sure, check the short sale procedure being followed in your area.