What to Do if My House is in Foreclosure?
What is Foreclosure?
In legal terms, foreclosure is the legal process that banks and various mortgage lenders undertake in order to recoup any losses from borrowers who cease making payments towards their mortgage loan. When a homeowner takes out a mortgage loan in order to purchase a property, they are agreeing to make timely payments (which are typically per month), which are ongoing until they have paid back the amount used to pay for the property.
If you are unable to pay back your monthly repayments, which can occur due to experiencing hardships such as losing your job, the mortgage lender will aim to take back some (or all) of what was owed, which is done by taking over the ownership of the property and putting it on the property market for sale.
So, when a property becomes foreclosed, the occupants and homeowners of the home are essentially evicted from the property. Additionally, the foreclosure of the property is then noted on their credit report, which can cause severe future implications for their credit score as it has a negative impact.
How to Avoid Foreclosure on Your Property?
When your property is heading towards foreclosure, it can be a very financially emotionally challenging time. If you are worried that you may be heading in that direction, there are a few things you can do to give yourself time to stop the downwards spiral and hopefully regain control of your mortgage payments and save yourself from being evicted from your property and having your home repossessed.
Make Monthly Payments:
It’s important to prioritise your monthly mortgage repayments, however we understand that if you are heading towards foreclosure, then you probably do not have the financial funds to ensure that you can do this monthly. An alternative is to use any emergency savings and liquidate any other assets. If you can do this, then you may be able to make a few large payments, which can keep you afloat for a while.
Discuss Options with Your Lender:
It’s always important to speak to your mortgage lender before you make any big decisions. If there is a genuine reason for your missed payments, such as illness or redundancy, then your mortgage lender may be able to help you work out an alternative plan. They may be able to take the amount owed from the missed payments and add it back to the incentive of your monthly payments.
Do a Short Sale:
If you aren’t eligible to pay anything and are being forced to move out of your home, then you can conduct a short sale. This is essentially where you sell the property for less than what you owe on the house.
Ask for Forbearance:
Mortgage forbearance allows those who are struggling with their mortgage repayments to put their finances on hold temporarily. Throughout this time, your mortgage lender will expect that you are trying to get yourself back on your feet and sort out your finances, and at the end of the period, you will pay back a sum of money that is owed or set up another repayment plan.
This article was written by a quick house sale company, We Buy Any House. If you’re wondering “how can I sell house fast?”, head to the We Buy Any House website for more information relating to all property related enquiries.
