“I’m late on my payments…will I have to surrender my home to the bank in [market city]?” ”
Nobody likes to be evicted from their house. However, occasionally life throws you a curve ball and those financial obligations become too much to handle.
If things get out of hand, you may find yourself in the terrible circumstance of having to give your house back to the bank in [market city] [market state], leaving you temporarily homeless. Furthermore, there may be long-term ramifications, such as a significant and long-term impact on your credit (and your ability to get a house in the future).
That is something no one wants. That isn’t the best result. Fortunately, you can start implementing a strategy today to help you protect yourself and get back on track to financial stability.
Here’s a brief overview of the foreclosure process
Depending on your area and the type of mortgage you have, the foreclosure process may differ.
If you miss a few mortgage payments, your lender will usually send you notices, followed by warnings. If you don’t make up the missed mortgage payments, the loan company may put your house up for public auction.
The length of time you can stay in your home after it has been sold at auction is determined by the state in which you live. You will, however, need to locate a new location to stay at some point.
Fortunately, you have options!
Waiting until your property is foreclosed on can have a negative impact on your credit score. Working out a “deed in lieu of foreclosure” agreement with the loan company is one way to protect yourself.
This is when you give the lending company ownership of the house in order for them to avoid having to pay the money that would have been spent on foreclosure procedures, which can be rather costly. You also get to save your credit score from being harmed by a foreclosure.
You can also keep your home from going into foreclosure by selling it before the auction. If you pay off your debt in full, you will no longer be penalized and your credit rating will improve. (If your loan is not paid in full, you will be responsible for the difference.)
Consider the following scenario: You owed $100,000 on your property and sold it to us for $90,000. You’d give the loan company that money, plus $10,000 to cover the shortfall, and your debt would be paid off. (If you contact a real estate attorney, you might be able to work out a deed in lieu of foreclosure agreement with the lending company, in which the loan company agrees not to pursue the difference in exchange for the house’s deed.)
We’re expert real estate investors at [business], and we’d love to hear from you. Call us immediately at (440) 291-5361 to see what we can offer you for your home, even if it requires repairs.
I want to avoid giving my house back to the bank in Cleveland!
While losing a house is a traumatic experience, the financial and credit consequences are far less severe than if you simply wait out the foreclosure process. In fact, going through a foreclosure might lower your credit score by up to 150 points. So the short-term difficulty of selling your home is still preferable to the long-term misery of returning your home to the bank.