You’ve come across hard times and it just seems like there’s one thing after the other to deal with. Maybe you’re dealing with illness, divorce, the recession, job loss — whatever the case may be, you may be at risk of losing your home because you can’t make payments. The prospect of foreclosure is terrifying. You’ve worked so many years to get to this point, now what? Regardless of where you’re at financially and whatever the reason, there are five important things you should know about foreclosure.
1. You aren’t alone
Being in a position where you could lose your home feels so overwhelming. But here’s the thing. You are absolutely not alone. More than three percent of mortgages are delinquent. This means that more than nine percent of people within your subdivision more than likely struggled to make payments on their mortgage as well.
You are not alone, not in the least.
One interesting fact, is that mortgage delinquency rates are still higher than pre-Recession of 2008 levels. Consider that.
2. You have options
Whatever the situation is, contacting your lender as soon as issues arise is best. It can help you work with them so you can keep your credit intact and work something out. Let’s face it — the foreclosure process isn’t easy on anyone, let alone the lenders. They’d much rather work with you on something than take your home outright. Contacting them first may give you the best results.
In general, it costs lenders $50,000 to foreclose on a property. Not exactly a small chunk of change. That, on top of any improvements, repairs and updates can be costly. Some things they may be able to offer you instead:
- Loan modifications. The lender may be able to adjust your interest rate or repayment term, making the loan more manageable for you.
- Refinance. If you have good credit, you may be able to get a refinancing loan to repay your current mortgage. You’d get approved for another loan at a lower interest rate, making it easier to pay back. You’d need enough equity and a good credit score to make this happen.
- Repayment. Your lender may be able to have a repayment plan adjusted for three to six months You will have to continue making payments on your overdue mortgage but the length of the new repayment plan depends on the borrower and how much is delinquent.
- Forbearance. This option can provide temporary relief and put a pause on your payments. The deferred payments will be tacked onto the mortgage at the end of your loan.
3. A short sale or deed-in-lieu aren’t good alternatives to foreclosure
When you have a “short sale” you end up selling the house for less than you have on the mortgage. Once the sale is complete, the lender could still try to collect the remainder of the mortgage from you.
With deed-in-lieu of foreclosure, you sign over the rights away to the house and give it to the lender. Once again, you could still be on the hook for the remainder of the mortgage.
These situations are not ideal and clearly not resolutions for the issue. There’s a lot of information out there promoting these two options, but there are two important facts you may not know about.
- Foreclosure, short sale, and deed-in-lieu have a similar impact on your credit and stay on your credit report for the same amount of time.
- If you are in a dire situation, foreclosure will let you stay in the home the longest amount of time.
In short, if they all affect your credit the same and you can still be on the hook for the mortgage, a short sale or deed-in-lieu are poor alternatives to foreclosure.
4. You can get free housing counseling
If you’re having an issue with your mortgage you may feel like you have to throw money at an agency to help you understand your situation and options. There’s no need to though. The Department of Housing and Urban Development (HUD) offers free housing counseling to struggling homeowners. Check out the Homeowner’s Guide to Success: What to do if you can’t pay your mortgage for starters.
You can also contact your regional HUD office to seek help and get free housing counseling. A counselor can tell you if there are any programs to help you out. Also, be aware of scammers who may try to take advantage of a foreclosure situation. Read up on the matter in Protecting Yourself from Opportunity Hunters and Frauds.
5. Selling for cash could be best
Selling your home is not an easy or short process. Regardless of market conditions, the 45 days after an offer that it can take for inspections, appraisals and more can be too long when your credit is on the line.
If you lost your job or are dealing with an ugly divorce and just want to wash your hands clean of it, there are people who will buy houses with cash. If you’ve exhausted all options with your lender and foreclosure is imminent, selling for cash may be your best bet.
The good thing with this option is that these buyers will buy your home as-is, in cash. There is very little hassle and things can be expedited, so you can move on with your life.
This is where Sundae can come in and help. Our specialty is working with buyers who need a little help and want to get the highest price on their home. When we buy houses, we assess the advantages and risks and offer the best price possible. You don’t have to worry about showings or time-consuming processes. We’ll take care of it.
We’re so confident in what we do that if you find another price that’s better than ours, we’ll give you $1,000, no questions asked. We also offer $10,000 in cash advances to help you move and get settled.
If you’re facing foreclosure, it can seem like the end of the world. It’s a stressful situation for sure but know that you are not alone and focus on what you can control. You can sell for cash and get the best offer to make the most out of this situation. You want to work with people you can trust and have your best interest at heart. You’re not just a number or a profit and we know that.
Want to learn more about Sundae? Get in touch. 1 (800) 214-4426