Having your home go into foreclosure is a scary situation that nobody wants to experience. Foreclosure happens when you fail to pay your lender back the amount you agreed according to their terms. When you stop making payments, the lender has the right to take back your property. However, the bank will not come for your home immediately you breach the contract. Most lenders offer a grace period of about 15 days that may have a late fee attached. The foreclosure process only happens after you not made payments for 90 days. Depending on where you live, the process will then take anywhere from two to twelve months to complete. As such, you have enough time to make changes and see whether you can remain in your house. Read on to discover the mortgage foreclosure options to consider.
- Contact your Lender. As you now know, foreclosure can be a very time consuming and expensive process. Any lender will prefer working with you to find a remedy instead of repossessing your house. Honesty and the will to work together will play a primary part in helping you to get back on your feet. The lender can choose to refinance you using new interest rates and terms to cover your mortgage. You can also work with your bank to come up with a repayment plan that works with your budget. The bank may also decide to change the terms of your current loan make it more affordable to you. Whatever the decision, you must be willing to work with the bank.
- Filing for Bankruptcy. Filing for bankruptcy will negatively affect your credit. However, it may be the only option to delay foreclosure while reducing or eliminating your debt. When you file for bankruptcy, an “automatic stay†is imposed on your assets. An “automatic stay†inhibits creditors from any collection efforts. However, ensure you talk to a Philadelphia bankruptcy lawyer to help you with this process. The law allows us to choose from two types of bankruptcy: Chapter 7 and Chapter 13. If you select Chapter 7, the court appoints a trustee to sell your non-exempt assets to settle your debt. Chapter 13 allows you to keep your property, but you have to create a repayment plan to repay all or a portion of your loan.
- Short Sale. A short sale happens when you sell your house for less than what you owe on the mortgage. While not as damaging as bankruptcy or foreclosure, a short sale will still affect your credit score. Before approving for a short sale, lenders consider the number of assets you have borrowed and whether you are already a defaulter. A short sale requires you to list your property with a real estate professional.
With some of these options, you will end up losing your property. However, it will be without foreclosure. Foreclosure can be stressful, embarrassing, or even have long-term consequences on you. Make sure you understand all the available options to avoid such an occurrence. Sometimes even walking away from your home voluntarily is the best solution.
{ 0 comments… add one now }