Going through foreclosure can be a nightmare, but that doesn’t mean it can’t be avoided. Just as Michelle Singletary said, “A foreclosure does not define you financially.”
What does foreclosure mean?
This is what happens when a house mortgage is not paid and enters default. During this period, the lender demands that the entire loan is paid off. When the loan can’t be repaid, the lender begins proceedings to take back the home and sell it so as to recover the money. When this happens, the person occupying the house is evicted, often impacting their credit negatively and at the same time leaving them homeless. Avoiding foreclosure will be the only option the homeowner has.
What often causes foreclosure?
Apart from those taking part in mortgage fraud, with the aim of intentionally refusing to make a single payment, most homeowners face foreclosure because of these reasons:
•Unexpected unemployment or job less
•Sudden medical emergency
•Death of a family member
•Inability to pay an increased interest rate
•Sudden home maintenance expense
How to avoid foreclosure:
The best way to prevent foreclosure from happening is to avoid filing a Notice of Default. Most lenders will file this notice to protect their interests. So, if you know you are not likely to pay up your mortgage, you should contact your lender. Don’t shy away from communicating with your lender or ignore their letters, as this will only make things worse. Here are some ways to prevent foreclosure:
•Make up your payments: Some lenders might be kind enough to allow you work out a play to repay your debts before they take legal action against you.
•Debt forgiveness: If you can guarantee your lender that you will be current after missing some payments, the lender might waive your obligation.
•Spread out your payments: If your payment is for example $1,500 per month, the lender might allow you add $100 to each payment till you catch up.
Selling your house fast when foreclosure looms:
Many home owners try to sell their houses fast during this period. For them, it isn’t just about selling the house, but doing it quickly. Here are some steps to make your home sell in record time:
1.Pricing The House:
•Don’t salvage non-existing equity: The fact that the house was bought at a higher price than the current price is not relevant to the fair market. You have to make a decision if you want to make money out of your home by holding out for the highest bidder, or you are trying to avoid dealing with the negative credit report a foreclosure could cause.
•Don’t overprice the house: If you are desperate to sell your house, make sure the price is relatively low. If you overprice the house, most buyers will not even see it because it will be out of their price range. Make sure the price is realistic enough to avoid it sitting in the market for a long time.
•Know the worth of the house: Have a real estate agent estimate the value of the house by performing a Comparative Market Analysis (CMA).
2.Marketing The Property:
•Use the internet to market your home: Although marketing is the responsibility of your real estate agent, make sure it gets done. Over 80 percent of home buyers begin their search on the internet. So, you should list your house on all the top real estate listing sites.
•Include enough pictures: Property listings that have no pictures are often skipped by most buyers. The more pictures you post, the longer time the buyers will spend looking at your property.
3.Condition of The House:
Make sure the house is in perfect condition: Fix, clean and spruce up the house. But avoid spending much. If you are facing foreclosure, you might not have enough funds to make major repairs. Focus on the things that don’t cost much but will make the house more presentable, such as repainting or getting a better carpet. Ask your real estate agent to refer you to a handyman that will fix minor leaks, cracks in the tiles or holes in the walls.
Just like many home owners, you might think it is impossible to sell your house because you owe your lender too much money. But you can sell your house fast and avoid foreclosure by following the above steps.