To avoid foreclosure it is highly recommended that you seek competent legal help. Please make sure the attorney that you contact has experience in foreclosure as it is an ever-changing space. If you need help selling, please call us 239 694 3300.
If you are behind on your mortgage, there is a chance that the lender may decide to pursue a foreclosure. The good news is that there are many different ways to postpone a foreclosure or avoid it altogether. This may make it easier to salvage any equity that you have in the house while also keeping your credit score from tanking.
Avoid Foreclosure: Short Sale
A short sale occurs when a lender agrees to let you sell the home and use the proceeds to pay off as much of the mortgage as possible. Short sales tend to take longer to complete because the bank must sign off on any deal that you negotiate. While your credit score may go down temporarily, it is easier to recover from a short sale compared to a foreclosure. This is because future lenders will see that you were proactive about solving a serious financial problem.
Avoid Foreclosure: File for Bankruptcy
There are many options for filing for bankruptcy if you find yourself in that position. In most cases, you will file for Chapter 13 bankruptcy, which means that you will negotiate a payment plan that allows you to get current on a secured loan. However, if you file for Chapter 7 protection, it may be possible to keep the equity in the home even if you have to sell it. Those who own houses that are above the Chapter 13 secured debt limit may be able to file for Chapter 11 protection. One of the primary benefits of filing for bankruptcy is that you get an automatic stay of creditor collection activities. This means that a lender may not be able to foreclose your home for up to five years in a Chapter 13 case.
Talk to Your Lender About a Loan Modification
If you have good credit, it may be possible to negotiate new loan terms with your lender. Talk with a good financial professional to figure out if this is the right option for you. This may result in getting a lower interest rate, making interest-only payments for a period of several months, or rolling past due payments back into the loan. A foreclosure could make it difficult or impossible to get a mortgage in the future. Therefore, it is critical that you let your lender know if you are having trouble making mortgage payments. Generally speaking, banks prefer to work with borrowers as long as they are making a good faith effort to stay current on their home loans.
Facing foreclosure on your home can be a stressful thing, but it can be avoided if you navigate things the right way. Take steps like the ones above and you can make sure that you can make the best move for your financial future while avoiding foreclosure.
Here’s another article you might like: What You Need to Know to Get the Best Home Loan Possible
If you’re thinking of selling your home, contact us so we can help!
Steelbridge Realty LLC is a Licensed Real Estate Brokerage that utilizes cutting-edge marketing techniques and data-driven Real Estate solutions in today’s ever-changing environment. Our group of professionals have decades of experience and have navigated through many business cycles. Our diverse background gives us the tools to guide people towards successful decisions.