Closing the Door on Foreclosure
Mortgage Options to Help Protect Your Financial Future
You’ve probably heard the word “foreclosure” before. If you’re like most people, however, you don’t know what it means. You probably know it has to do with losing a house. You know that it’s terrible, but you don’t know any specifics. And the things we don’t understand are the scariest of all.
That’s why I’m here to help you understand what foreclosure is and what your options are if you ever face it.
What is Foreclosure?
Foreclosure happens when someone no longer pays their mortgage, and the lender takes over ownership of the property. A lender will send a notification of any late payments, giving the homeowner a chance to correct the situation. After three missed payments, however, the process of foreclosure typically begins.
The financial institution will often try to sell the home, through auction or on the market, and evict the former owner upon successful sale. Foreclosure is a horrible and stressful occurrence in real estate.
Foreclosure can be devastating on credit rating and future prospects. It can become difficult to purchase or rent a home with a foreclosure in your past. Some jobs even make credit history an integral part of their hiring process.
Lenders don’t want to foreclose on your home, however. Foreclosure is messy, expensive, and time-consuming. Banks know that selling houses isn’t easy or cheap and, in specific markets, won’t bring a profit. It’s simpler for your lenders if you can keep making your payments.
So, what can you do to close the door on a foreclosure?
For one, there may be places you can cut costs. Many of us spend more money than we even know. You might be surprised how much some trimming in your budget can produce.
Do you have multiple streaming services for entertainment? Do you have a cable package you don’t need? Maybe your internet is faster (and more expensive) than you need.
There might be payments you’re making accidentally. Do you have a gym membership, an app subscription, or another expenditure on something you no longer use? Do you have redundant insurance or extra fees you’ve overlooked?
Cutting small costs can make a difference. Sometimes, to find the money to pay your mortgage, you may need to aim higher. Some experts recommend selling a newer car, purchase something older, and use the profit to deal with debt.
Where can you save some money?
Contact Your Lender
You should also contact your lender. As mentioned above, they don’t want to foreclose on your home. Many organizations will provide options for owners to help them continue covering their payments.
For some, refinancing the loan could be a solution. Refinancing can help consolidate any outstanding debt in other areas, potentially bringing down monthly payments. The term of your mortgage will increase, but you will have the chance to get your head above water.
Lenders can also find ways to postpone payments, renegotiate terms, or even allow a sale to take place that won’t earn all their money back. There is a lot a lender will do to help avoid the mess of a foreclosure. Reach out to them as soon as you can!
Lastly, you may find that it’s time to sell your house. Your payments are becoming too much, or you need to move away for work or family. Maybe you simply need a new start. If you have received a foreclosure notice, selling might be your best option. While it’s not always easy to let go of a home, there is a time for everything.
Even in a lousy market, or one that favors the buyer, it’s possible to sell your house. Quickly even!
If you are interested in finding out your options, I can help you find the best way forward, without having to head to the bank OR going through the traditional Real Estate Agent route. Less headaches, bigger win!
Don’t let a foreclosure limit your future. Let’s chat.