Foreclosure is one of those words, like bankruptcy, that scare a lot of people financially, even if it isn’t something they or anyone they know have experienced. Because of this fear, if you are actually in danger of foreclosure on your home, you may not know where to turn for help. But don’t worry, potential foreclosure doesn’t mean you are out of hope.
What is Foreclosure?
The mortgage loan that you secured to buy your home is guaranteed by your home, so when you fail to make a mortgage payment, the mortgage lender will begin the process of repossessing your home. This process can start as soon as the day after you miss a payment, which is why financial advice so heavily stresses not missing a single payment. But that doesn’t mean you are out of time to fix the issue. Your mortgage lender can’t fully repossess your home until 120 days after the first missed payment, which gives you three months to either get current, negotiate a compromise, or sell your home.
Negotiating Your Loan
While getting current on your mortgage is the best way to deal with a potential foreclosure, most people don’t miss a payment if they have the money to pay their mortgage. At the same time, your mortgage lender doesn’t want to repossess your home if they don’t have to. They want you to keep paying your loan, so if you find yourself facing foreclosure, it is time to talk to your lender. Take a look at your financial situation and come prepared with some ideas of what would work for your situation. You can set up a repayment plan, apply for forbearance, or refinance your home. All of these can be a helpful way to get you back on track, but what works best will depend on why you fell behind on payments in the first place.
Selling Your Home
If you don’t think you will be able to get back on track or you just want to start over, you can sell your home to recoup the remaining balance of your mortgage and pay it off. The biggest challenge for this option is that you have to have the sale closed before your mortgage lender repossesses your home, so you don’t have a ton of time to make the sale, especially if you consider the fact that traditional real estate sales can take 3 months or more. Rather than going through the traditional process, cash sales move quickly and can close in as few as seven days, which makes them a perfect option to get you out of your financial woes.
If you are facing foreclosure, the worst thing you can do is ignore it instead of taking steps to deal with the problem. The consequences of losing your home in foreclosure can be long-lasting and are very difficult to get rid of. There is always something you can do to solve your problem.
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