9 Things to Know When You are Facing Foreclosure
Having a home foreclosed on is an unfortunate situation that many Americans face. It is something that people don’t want to face head on, so it is often ignored until it can’t be any longer. However, that is not the best way to deal with a foreclosure.
If you are facing or worried about foreclosure, here are 9 things that you need to know.
Foreclosure isn’t fast
Going through foreclosure is actually a process. It is not a single event. It is also something that you need to separate from your identity. You are not being foreclosed, the lender is foreclosing on the property.
There are four stages to foreclosing on a property
Your house is not going to foreclosed on overnight. There are four stages that need to be completed. Each state is a little different so you will need to check into the terms and lengths of stages for your own state.
You have options
If you are struggling to pay on your loan, foreclosure is not your only option. However, you are not going to know what options you do have unless you talk to your lender right away. Do not wait until you have missed several payments and started receiving notices from the lender.
Lenders do not want to foreclose on property
The lender makes money when you pay on your loan. The lender does not want to foreclose on your home. They do not want to own property, they want to be paid interest. Be upfront with your lender to see what your options are.
You can still sell your home
When you are facing foreclosure you still have the ability to sell your house. Do what you can to get your house 100% showing ready and then carefully stage it, even if you are only using the items that were in your house. Look for ways to make your house appeal to buyers.
You are given several warnings
It can be nerve-wracking to receive a foreclosure notice in the mail, but it doesn’t mean it is too late. Even when you are behind on 3 payments, there are still options you can use to stop the process.
Short sale is an option
If you are having problems paying your mortgage and you haven’t been able to sell your house, you can try for a short sale. Lenders might be willing to have you sell our house for less than you owe on it in order to get it sold. This will still have an impact on your credit, but it is better than going through foreclosure.
Foreclosure impacts your future
Once your house has been foreclosed on, it will hurt your chance of receiving a loan in the future. It should only be used when you have no other options left.
Know your mortgage
One reason that homeowners end up in foreclosure is because they don’t understand the terms of their mortgage. Make sure that you ask questions to your lender and read over the details of the terms.
Foreclosure is a process that will impact you for years to come. There are alternative options if you are struggling to make your mortgage payment. Be honest with your lender the moment you know you are not going to be able to make a payment to see what options exist for you.