There are many resources you may not know you have–such as a 401K, Structured Settlement, Annuity, or Life insurance policy–that could save your home from foreclosure.
Foreclosure rates and statisitcs are scary, especially when you are a homeowner who is living paychack to paycheck.
- 1 out of every 200 homes will be foreclosed upon. For a city like Washington D.C., that translates to 3,000 Washingtonians losing their homes to foreclosure each year.
- Every three months, 250,000 new families enter into foreclosure each year.
- One child in every classroom in America is at risk of losing his/her home because their parents are unable to pay their mortgage.
Source: Mortage Bankers Association
Too many Americans do not realize the possible resources they may have at their disposal that could possibly save their home from foreclosure. Woodbridge Investments is here to help you understand how liquid assets are among some of the most powerful and yet unknown ways to use your money when you need it most.
Some of these resources include but are not limited to:
401K
You may be eligible for a “hardship withdrawal,” for those unexpected circumstances when you may need your money before retirement. According to IRS safe harbor regulations, your “hardship” must represent an “immediate and heavy financial need” and is necessary to satisfy the financial need. Also, there must not be “any other resources that are reasonably available,” to you to handle that financial need. The IRS has deemed the following four distribution reasons as representing an immediate and heavy financial need:
- Certain medical expenses for you, your spouse or your dependents
- Purchase of a primary residence (excluding mortgage payment)
- Payments of certain post-secondary education expenses for the next year for you, your spouse or your dependents
- To prevent eviction from or foreclosure on your primary home
Please be advised that if you take a hardship withdrawal from the plan following “safe harbor” rules, you may be suspended from making contributions to the plan for a minimum of six months. Some plans also allow hardship withdrawals for other reasons. Check with your benefits department. You will need to show your employer proof of how you intend to use the money, and proof that the amount you requested isn’t more than enough to satisfy your need.
Whole Life Insurance policy
With level premiums and the accumulation of cash values, whole life insurance can provide money later on to help with temporary needs or emergencies.
Unlike term life insurance, money you pay into your whole life policy accumulates as guaranteed cash values. If you choose to surrender the policy, these guaranteed cash values would be available to you. Or, as long as the policy is in force, you may borrow against them as a policy loan at the current policy loan interest rate.
Your guaranteed cash value depends on the kind of whole life policy you have, its size and how long you have had it. The growth in cash values is tax deferred under current federal income tax law. Borrowed amounts reduce the death benefit and cash surrender value.
Structured Settlement
Structured settlements can be inflexible and often are inadequate to deal with immediate financial needs or unplanned emergencies. United States Congress and most state governments have agreed that settlement victims have the right to sell their structured insurance settlement and receive money from insurance settlement in the way they see fit. Court approval is usually required to protect the beneficiary from an inappropriate sale and also to verify that the sale is in the victim’s best interest.
Selling your structured settlement or annuity for a lump sum can provide you with the cash you need now to save your home from foreclosure, and help you get back on track. It is your money, therefore it is not a loan that must be repaid. You can choose to sell all or some of your future payments. You can sell payments from a structured settlement even if you have sold previous payments, providing there are some remaining.
The size of your lump sum payment is partially determined by which payments you sell and the number of payments you sell. To find out how large a lump sum you may be entitled to you will need to obtaina quote from a company that will buy your structured settlement payments.
If you are looking to sell your structured settlement payments, or to find out how much cash your payments are worth, call Woodbridge Investments toll free 1-866-865-7044
You can also visit us on the web at www.woodbridgeinvestments.com and get a free appraisal online.
