6 Ways You Can Avoid Foreclosure
If you’ve been having trouble keeping up with your mortgage payments, you may be wondering how to avoid foreclosure. The idea of foreclosure is big and scary, but it isn’t a guarantee. With a little know how, you may be able to avoid foreclosure. Read on to learn how you can save your house from foreclosure.
Find a Way to Get Caught Up on Payments
If you don’t want to leave your home, the ideal scenario is to find a way to get caught up. You could ask a friend or relative to lend you the money to get caught up, sell things to help round up the money, or you could try to get a personal loan.
However, this can be a problem if the financial difficulties that made it hard to make your payment in the first place aren’t temporary. You’ll likely have just as much trouble paying back the money you borrowed to get your mortgage caught up as you did keeping up with the payments in the first place, and you’ll still have a mortgage payment to make each month on top of the new debt.
Options for Selling to Prevent Foreclosure
One of the most obvious ways to deal with a loan you can no longer afford and help to avoid foreclosure is to sell the home. There are a few ways you could go about that.
Sell to a Professional Home Buyer
If you need to get out from under a loan quickly, there’s not really an easier (or likely faster) option out there than selling to a cash buyer like Sell Your House Direct. You contact them, they give you a quote, and you can close in as little as a week.
List Your Home Traditionally
You could also list your home traditionally with a real estate agent or even put it on the market for sale by owner. The issue with this selling option when you’re looking at potential foreclosure is that the amount of time it takes can be unpredictable. Your lender might foreclose on the home before you can get it sold if it doesn’t sell right away. The average time that homes sit on the market is 68 days according to Zillow; plus, it typically takes 30 days after that to get to closing. If you don’t have the kind of time, this might not be the best option for you.
Ask Lender to Approve a Short Sale
If you owe more on your loan(s) than your home is currently worth, you’ll need to get approval from your lender for a short sale. This means that the lender will accept less than the house is worth in order to avoid the costs and trouble of foreclosing on the home.
A short sale can happen whether you sell your home with a real estate agent or a cash buyer. Regardless of your sales method, it’s a good idea to make sure that the company or person buying or selling your home has experience working with short sale properties.
Accept a Deed In Lieu of Foreclosure Deal
Sometimes lenders are willing to offer you a way out of your mortgage. A deed in lieu of foreclosure basically makes it so that you don’t own the house anymore and you don’t owe the mortgage company. The lender is basically letting you walk away so that you don’t wind up with a foreclosure on your credit report, though the missed payments and possibly a record of the deed in lieu agreement will remain.
Ask Your Lender to Allow Loan to be Assumed
Most loan contracts these days aren’t written so that they can be assumed by a new buyer (meaning someone else steps in and takes over the loan contract and the mortgage payments in your stead). However, a lender might be willing to make an exception and alter your contract so that this is a feasible option.
They may also be willing to allow for a loan assumption lease agreement to take place. This would mean that someone else would take over the payments and the home with the loan remaining in your name until the buyer could get the money saved up for the down payment. They would then buy the house, removing it from your name entirely.
Bankruptcy will stop foreclosure proceedings. However, it doesn’t mean that you don’t have to pay the mortgage company what you owe them. It simply means that they’re required to negotiate terms for you to pay them back over a longer amount of time.
We Can Help
At Sell Your House Direct, we’re committed to helping our clients deal with the threat of foreclosure in a way that is non-judgemental and compassionate. Feel free to fill out this form to get a no obligation quote in 24 hours or less.