Facing the prospect of foreclosure on your home is scary. Not only can foreclosure ruin your credit rating, but the risk of losing your home is never a good thing, and it will be harder to find another place to move into if you have gone through a foreclosure. Fortunately, there are many options and resources available to help you avoid the risk of losing your home from foreclosure.
Pre-foreclosure is the first step of the whole foreclosure process, wherein the homeowner is notified in a legal proceeding that their property is getting repossessed. This happens when the homeowner fails to make payments for three consecutive months. The lender files a notice of default, notifying the homeowner that the property will be held for foreclosure if payments are not made immediately.
Once the pre-foreclosure process has started, there are many ways homeowners can consider stopping foreclosure.
A loan modification is a relief plan for homeowners who are struggling to keep up with their monthly mortgage payments. If you receive a pre-foreclosure notice, one of the best solutions is to talk with your lender and negotiate the terms of your loan. You can request to extend the length of your loan for you to pay less every month.
To stop foreclosure, you have the option to apply for a personal loan to pay off the existing mortgage, including the delinquent amount. Personal loans are unsecured loans, meaning you won’t need to have collateral to apply for this type of loan.
You have the option to hire a real estate agent to list your home for sale in the market. This will allow more potential buyers to view your property. Before doing so, you have to determine how far along are you in the foreclosure process. Your home will also have to be in financeable condition in order for a buyer to get a loan on it. If a contract is accepted, there is the risk that it may fall through after a few weeks leaving the homeowner with little time.
If you own a house and it is under pre-foreclosure, you may have the option to rent it out and collect the monthly rental income to pay for the mortgage. Before receiving tenants, you have to disclose to them the current situation of the property. Once you have decided to rent out your property while on pre-foreclosure, you are expected to act as a proper landlord and take on necessary repairs to keep your tenants happy while they are renting from you.
A mortgage refinancing pays off your existing loan with a new loan and can be acquired through your existing lender or a different mortgage lender. Refinancing is an option if a foreclosure has not started and your existing mortgage is still in good standing. Before you miss any payments, you can start speaking with your lender because they may have additional options for you that can ease the process.
If you are not eligible for any payment restructuring options, one of the remaining solutions is to attempt a short sale on your home. A short sale is a pre-foreclosure home that goes up for sale where the sales price is lower than your mortgage balance. Before doing this, you need to get approval from your lender first.
Bankruptcy should be considered as your last resort to stop pre-foreclosure on your property because it can cause severe damages to your credit and it is not always guaranteed that the court will allow you to stay on your property while undergoing the legal proceedings. When you file for bankruptcy, it doesn't really stops the foreclosure but instead extends it. Before taking this action, it is advisable to talk to your lawyer first and ask for a thorough explanation of your options, cost, and the time frame involved. Interest and legal fees will be accrued during this time.
If you’re looking to sell your home fast before foreclosure, you may consider receiving a cash offer from real estate investors. Unlike real estate agents, cash buyers don’t take commissions, and they are willing to buy your home at any condition and some will even pay for your moving costs.
If you are facing foreclosure on your property, our team from We Love All Homes can help you get the best solution to avoid this critical event in your life. Through our simple process, we offer stress-free options to homeowners who need to sell their distressed properties quickly. Give us a call right now at (469) 278-5635. Let us talk through your options and avoid the risk of losing your home from foreclosure.