Facing foreclosure? You need to know your options. Here’s our guide on what to do to avoid foreclosure and its consequences.
Few things are more heartbreaking than losing your home. But sometimes, circumstances change, and we find ourselves facing foreclosure.
More often than not, reaching that point is due to circumstances beyond our control. And it can happen so quickly.
One minute you’re employed and earning and living the good life. The next, your job has gone and you’re juggling debt.
In this situation, you should try and avoid foreclosure if possible. Foreclosure means that your bank or lender takes possession of the mortgaged property, because you have failed to keep up payments.
The property will then be sold off to cover the loan. It’s pretty unlikely you will see a cent of this, and any investment you’ve made in the property is lost.
Sell Your House
Wouldn’t it be better to take control before you reach this point and sell your house? The chances are you will get a better price, so you can pay off the loan and still have some cash. Let’s run through some options.
First of all, don’t panic! You may have tools at your disposal to delay the foreclosure. These include assets, savings or even unemployment or disability insurance.
Talk to the lender. Perhaps you can work out a payment plan, or even put payments on hold for a while on the grounds of hardship. There may even be an option to refinance.
Contact The MHA
If those ideas are no-go, contact the MHA. The Making Home Affordable (MHA) program offers free advice on dealing with the threat of foreclosure, including ideas on keeping your home.
If the problem still persists, there is a more extreme option, which is filing for bankruptcy. This action puts the foreclosure on hold.
There’s no guarantee it will stop the foreclosure altogether, but it will give you time to make a plan.
If time is all you are after at this stage, go for a Chapter 7 bankruptcy. But if you want to try and keep your home, a Chapter 13 bankruptcy is better, as it allows you to restructure your debts.
At this point, you should think very carefully and take professional advice. This is probably the time to take control and sell your house and avoid all the negatives of bankruptcy.
Even now, you have a couple of options.
If you can stall the bankruptcy long enough, you may be able to market your home and achieve the best price. But there would be costs involved.
Alternatively, you could sell your house for slightly less to a cash buyer. That’s a fast solution. But that means finding a cash buyer.
Quick Sale, No Fees
If you are in Texas, there is a great option. There are professionals who will buy your house for cash, and still give you a good price.
The advantages here are that it’s fast, it’s fair, and you’re not waiting on someone to arrange finance.
Even better, there is absolutely no need to do any repairs, or even cleaning before you move out.
And there is no commission and no fees. Simply pay off your loan and begin the next stage of your life with cash in hand.