When illness, divorce, or other circumstances may mean you end up behind on your home loan. In the event that you get behind and can’t get up to speed, the bank may start foreclosure procedures against you.
Being in foreclosure can have a large number of negative outcomes. You lose your home as well as the cash you put into it before the dispossession and your FICO rating will be low, for as long as seven years. At that point, the bank may still indict you to recoup any remaining cash owed. Also, you may end up paying taxes on the home loan amount that you haven’t paid, because it can be treated as salary by the IRS.
There are a few methods you can try to avoid foreclosure and the negative consequences.
Work with the bank
When you realize you won’t be able to fulfill your payments, going to your bank can be your first resort. Banks will work with you as much as possible depending on your situation. Some options with your bank are:
- Forbearance, meaning stopping payments for a period of time until you can get financially stable again and continue payments.
- Loan modification, where you and your lender adjust the terms of the loan to better suit your needs and make sure they get their money.
- Deed-in-lieu of foreclosure, which is handing over the deed to your home. You give up ownership and don’t have to pay your mortgage anymore.
Sell your house with a real estate agent
When working with your bank isn’t possible, you can sell your house to pay off the mortgage with the sale. A real estate agent will list your home and look for buyers. If you sell before your payments become past due, your credit will remain intact, making this a great preventative option. However, California has high real estate commission rates, which may take a chunk out of the final sale and leave you short.
Sell your house fast to a home buyer
Your last option is to sell your house fast to a home buyer. A home buyer is a fastest and easiest way to sell your house, as they charge you no fees and they buy your house themselves instead of listing it. You also don’t have to worry about paying for repairs. You can have the cash to pay off your mortgage in as little as two weeks, sometimes less.
If you’re in foreclosure and want to sell your house fast, contact Perpetual Motion Properties, home buyers in Lodi, CA. We will make you a fair offer and help you avoid foreclosure.