Most people have heard the word foreclosure, but they might not fully understand it. If you’re facing foreclosure, it can be scary and disheartening. Taking some time to learn more about the process and the available options can ease your worries.
What is Foreclosure?
A foreclosure takes place after a homeowner has missed several mortgage payments. At this point, the mortgage lender repossesses the property and sells it. While it might seem pretty cut and dry, there is a longer process that takes place. It begins when payments are missed and you are notified by your lender. After 3-6 months of missed payments, you are issued a public notice informing you of an impending foreclosure. You then enter the pre-foreclosure phase where you have time allotted to make up your debts or find a new solution. If no solution is found, the home is repossessed and sold and you have a foreclosure listed on your credit report.
Addressing Your Payments
People fall into financial hardship for many reasons and often it isn’t the individual’s fault. If you’re struggling to make payments, you should talk with your lender to work out a solution. It’s helpful to do this before the pre-foreclosure phase but it is possible to make arrangements after you’ve been given notice. Your first course of action should be talking to your lender about managing your payments. You can request payments to be temporarily suspended until you get back on your feet. Eventually, you’ll pay off the missed payments. You can also ask for a temporary reduction in your monthly payments or you can renegotiate your loan.
Selling Your Home
If you find no other suitable solutions, you may need to sell your home. Keep in mind that this won’t be a traditional sale. The goal of this sale is for you to make enough money to pay off your mortgage debt without being foreclosed on. If you’ve entered the pre-foreclosure phase, you’ll likely need to get permission from your lender before you sell. In some cases, you may also be forced to accept a low offer on the home and all or most of the money will go to the lender. If you choose to sell, you’ll need to sell quickly.
Perhaps the quickest way to sell is to sell to a cash buyer. These sales are over in 30 days or less and can even be completed in as little as a week. Selling to a home buying company offers you a more direct option.
Simple Cash Offers can provide you with a fair offer on your home in just 24 hours. Click here to learn more about the process.