Going through a foreclosure can be stressful for a homeowner. If you are in a situation where your house may be foreclosed on, you are likely entering uncharted territory. There is a lot of information to take in and understand. But you have options, one of which is selling your home before the mortgage lender forecloses on it. Here is some important information to know about selling a foreclosure.
How Foreclosure Works
The foreclosure process starts when a mortgage lender sends a default notice to a homeowner after four missed payments. The entire process can take several months and sometimes longer to complete.
Selling a House After Foreclosure has Started
Homeowners going through foreclosure still have the opportunity to sell it. That is even after the foreclosure process has started. In fact, you have up until the house is either sold at auction or the bank has taken over possession of it. During the period of pre-foreclosure, which is from the beginning of the foreclosure until its completion, a homeowner can continue negotiating with the mortgage lender. Therefore, to settle any debts that are owed on the house.
Selling a house that is in Foreclosure is a great way to come up with the money that is needed to stop the process. If you choose this route, you should work with a real estate agent who is experienced in this type of home sale. Once someone purchases your house, you can use the proceeds to pay off your debts to the mortgage lender. Although you will no longer own your home, you will no longer be riddled with mortgage payments that you can no longer afford to pay. You must tell your mortgage lender if you intend to try to sell the home. That way they can delay the process and give you an opportunity to find a buyer for it.
Hiring a Real Estate Agent
Hiring an experienced and competent real estate agent is a key component of selling your foreclosed home the easiest way possible. Your agent will help you figure out what your house is worth. Plus how much you can sell it for and whether it’s enough to pay off your mortgage. A good real estate agent will also negotiate with your mortgage lender to reduce the amount of money they are willing to take for the house to save it from foreclosure.
Short Sales
Mortgage lenders do not like foreclosures any more than homeowners do. Not only are they a source of stress for the homeowners, but they are a source of headaches for lenders, too. Foreclosures make lenders go through additional legal paperwork. Plus all the other steps that they like to avoid. Foreclosures also tend to cost lenders money in the end. So, a lender will generally work with a homeowner to avoid having to foreclose on a property.
A common practice for lenders is to agree to a short sale. A short sale is a sale of a house for less money than is owed on it. Although short sales are not ideal for lenders, they are preferable to the hassle of a foreclosure. Further, when you and your lender agree to a short sale of the house, you will avoid the huge credit hit that comes with having a foreclosure on your financial record.
Other Ways to Stop Foreclosure
Agreeing to a short sale is not the only option for avoiding foreclosure. Here are some other ways you can avoid that fate:
- Restructure your loan to change your monthly payments to something that is more affordable for you.
- Request a forbearance that will suspend your payments for a limited amount of time. Thus you can sort out your short-term financial situation.
- Find additional money by liquidating some of your assets. Selling some of your belongings or requesting a loan from a friend or family member.
- A deed in lieu is a process that requires you to sign the deed of the house back over to the lender. If you choose this route, your credit will take a huge hit, just as it will with foreclosure.
- Filing for bankruptcy is not an ideal solution. On the other side it will automatically stop the foreclosure process.
- Go through your monthly budget and find ways to save money wherever you can.
- Find ways to bring in more money like getting a second job or bringing in a roommate to share your expenses.
Another great way to get out from under a foreclosed is to sell it to Ben Buys Indy Houses. We are a trusted home buyer who will buy your house for cash, no matter what type of financial situation you are in. You can take the money you get from the home sale, pay off the rest of your mortgage, and get on with the rest of your life. There is no need to negotiate with your mortgage lender and hope for the best. It is truly a can’t-lose situation for you. Contact us today to see how we can help you.
