7 Ways to Prevent Foreclosure
Owning a home and living peacefully is every homeowner's dream. However, you can find yourself without a home if you experience foreclosure. Most homeowners consider
sell my house fast Newnan option to prevent foreclosure. However, you need to understand all about foreclosure before making a rash decision. That said, here are ways to prevent foreclosure.
What is Foreclosure?
A foreclosure is a legal action mortgage lenders use to take control of a property that is in arrears. For borrowers facing foreclosure, (1) there is often uncertainty about their legal rights and even the long-term consequences of foreclosure. After a homeowner is evicted from their homes after foreclosure, it affects their credit scores, and it could be challenging to find a lender in the future.
How to Prevent Foreclosure
If you find houses offering the option:
we buy houses Newnan, you need to consider it if you still need to pay your mortgage payment. Here are ways to prevent foreclosure if you're behind your mortgage payment.
Apply for Loan Modification
Lenders can adjust your monthly payment and interest rates to help you with manageable payments. They modify your monthly loans to be more affordable, enabling you to pay monthly payments and live in your home. Sometimes, the lender can extend the length of the loan payment by lowering your loan. Sometimes, this option is accompanied by a lowering the interest rates.
You must prove your financial struggles and hardships when applying for a loan modification. Alternatively, you can show low bank savings if you need to qualify for a loan modification program.
Conduct a Short sale
Homeowners wondering how to sell my Newnan house fast should consider a short sale to avoid foreclosure. A short sale is when you sell your home at a lower amount than your mortgage balance. It's the best option if you aren't eligible for other options for preventing foreclosure. Thus, you sell your house to home buyers who purchase homes despite the reason you're selling.
After settling your house sale, the money is paid to your lender. Then, the lender forgives you the balance of what you owe. However, you need to contact your lender before conducting a short sale. This is because your lender must approve the short sale and receive less money than you owe.
If you're willing to conduct a short sale, you need to find a buyer who is ready to pay the price for your house. Unfortunately, sometimes, lenders don't approve your short sale option. Therefore, this may not stop the foreclosure. However, you can find a reputable house-buying firm that buys houses as-is and for whatever reasons you're selling, including foreclosure.
File Bankruptcy
Filing for bankruptcy may not stop the foreclosure but delays the process to give you time to catch up with your payments. You can file for bankruptcy to save your home if you're in serious financial hardship. However, you need to file the right papers in court to ensure to court stops your foreclosure immediately. If you don’t have the legal skills, you can hire an experienced lawyer to help you file for bankruptcy.
The lawyer works with you throughout the process and advises you about your finances to help you make better decisions. However, if you fail to catch up with your payments, it can affect your credit ratings. In addition, if the bank revokes the loan payment suspension, your lender can demand their full payment. Again, this option could lower your chances of getting a refinancing if you have a negative credit score.
Sign a Deed In Lieu of Foreclosure
A deed in lieu of foreclosure is when a homeowner transfers their home ownership to their lender. Then, you are free from your mortgage obligation. Once you transfer the ownership, the official foreclosure proceedings stop immediately.
Sometimes, this option could help you avoid paying the remaining mortgage balance. However, you need to contact your lender and ask whether they will waive the remaining loan after giving them ownership. However, some lenders require you to pay the remaining loan balance if your house is less than what you owe them.
Cure the Default
Curing the default means paying your missed mortgage payments, late fees, and what you owe your lender. This helps you to catch up with late mortgage payments. However, this option favors homeowners with a paying plan, including lending from another lender. Most homeowners prefer this way to avoid foreclosure because it doesn’t involve the court.
This option can be tricky because it requires paying at least 90 days before the foreclosure proceeds. Therefore, if you miss your payments within this period, you could face foreclosure.
Request a Forbearance
You can request forbearance if you don't want to consider selling my house fast Newnan. This is best for homeowners who have temporary financial struggles. Thus, your lender agrees to put your monthly mortgage payment on hold for a specific period. This way, you can make a better financial plan and catch up with your payment before the agreed-upon period.
Thus, homeowners who prefer this option should be aware that the lender suspends the forbearance at the end of the agreed period. Therefore, if you owe your lender a large amount, you should consider paying lump sums to avoid foreclosure
Refinancing with a Hard Money Loan
Refinancing involves increasing the payment rates and interests to help you pay your mortgage and avoid foreclosure. However, this option favors those with a positive credit score. Refinancing gives you time to pay your loan and save your home despite the high rates and fees. Therefore, if you don't want to face the risks of refinancing, you can consider to
sell my house fast Newnan GA option.
Bottom Line
Foreclosure can be stressful, especially if you lack a financial plan and have a bad credit score. Therefore, you can avoid foreclosure by conducting a short sale, curing the default, or filing for bankruptcy. Despite the option you chose, you need to plan your finances well to avoid another foreclosure in the future. However, you
need to sell my house fast Newnan, if you need to start afresh while avoiding foreclosure.
Give us a call anytime at 832-506-8040 or fill out this quick form to get started today!
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