July 24, 2019
Foreclosure is a process that no homeowner wants to go through. But the reality is that sometimes, financial hardship can cause missed mortgage payments. If you fall too far behind, your home is at risk of foreclosure. Foreclosures don’t only cost you your home, they are also incredibly damaging to your credit. It is possible to avoid foreclosure, even if you are currently at risk. Here are some of the steps that you can take to avoid losing it all.
Consider Your Options For Getting Back Into Good Standing
Homeowners at risk of foreclosure have several options for getting back into good standing with their mortgage company:
- Reinstatement: This involves paying back the past due amount in a lump sum. This lump sum payment must be made by a specific date.
- Short Refinance: In this process, your mortgage company may decide to forgive a small part of your debt. The rest of your debt will be refinanced into a new loan.
- Special Forbearance: This is typically only granted in special circumstances, such as a medical emergency. In a special forbearance, you may get your payments lowered or suspended on a temporary basis. Your lender must agree to these terms, and generally only offers special forbearance if they believe the issue is temporary.
- Mortgage Modification: In a mortgage modification (also called loan modification) you can work with your lender to refinance and change the terms of your loan. You may be able to extend the term.
Bankruptcy or Deed In Place of Foreclosure
A bankruptcy doesn’t stop the foreclosure process, it only delays it by a few months. However, filing bankruptcy could provide you with a bit more time to make a decision. Refinancing isn’t an option after a bankruptcy because of the damage to your credit score. However, you may be able to sell your property at this time. A deed in place of foreclosure is another option for distressed homeowners. During this process, the homeowner gives the deed to the lender in exchange for forgiving the remaining debt. This allows you to avoid foreclosure and the damage to your credit.
Selling your home for less than the full amount of the mortgage loan is difficult, but it is often the reality of a pre-foreclosure sale. This is a choice that many homeowners turn to when all other options have been exhausted. In some cases, your lender may require that you complete the sale by a certain period of time.
If you are going through a foreclosure, it is important to know that you have options. Washington, DC area homeowners can sell their property to 4 Brothers Buy Houses and avoid all of the negative repercussions of a foreclosure. During the foreclosure process, time is critical, and you may need cash immediately to avoid negative penalties. By selling to 4 Brothers Buy Houses you can get the money you need right away, so that you can avoid a foreclosure and move on with your life.