Life happens, and when you’re in over your head in overdue mortgage payments, you have few options. Selling your home quickly is likely the best move to avoid foreclosure. But you’ll need to act fast. Here are some options for avoiding foreclosure.
If foreclosure is in your future, it’s advisable to contact your mortgage lender and ask about a loan modification. A loan modification is a set of rules in place to protect you as a borrower from expensive surprises by your lender. For example, if your interest rate increases drastically because you are in an ARM (Adjustable Rate Mortgage) . You may have a stable income, but the increase in interest rates may have made the mortgage payment unaffordable. Even if this isn’t the case, your mortgage lender is going to want to work with you because they want you to be able to keep making payments.
What you’ll need to do is contact your bank to see if they can modify or lower your interest rate. The mortgage lender or bank may require a “proof of hardship” which tells them why you are unable to afford the mortgage payments. If the modification is approved, you’ll be placed on a 90-day trial period to allow you to make three payments at the new lower rate. If you pay on time, they will finalize the loan modification. The downside of this option is that the negotiation process can be exhausting and lengthy.
If you decide to sell your home, there are a number of ways to do that. You can sell your home on the traditional real estate market with the assistance of a realtor or do it on your own as “For Sale by Owner” otherwise known as FSBO. FSBO may save you the cost of a realtor but buyers then expect to get a better deal since you are no longer paying 3% to a realtor. Both of these options will take time and showing your house to a lot of people.
The non-traditional route of selling your home is to sell it to an investor like Thomas Heyward. Thomas Heyward helps people receive the money they need now, and don’t have the luxury of time. When times are tight, it’s difficult to wait around for a real estate to sell your home on the traditional real estate market.
Thomas Heyward can offer cash and close the sale within days, you can even pick the closing date. This saves you time and the financial stain that a foreclosure leaves on your credit. There’s no need for bankers, real estate agents, home inspectors, or lawyers in this process. You walk away with a fair cash offer for your mobile home and no more debts owed for the home. It offers you a clean slate and brighter future, freeing you from debt.
We primarily serve Utah which includes the following areas:
• Salt Lake City
• West Jordan
• South Jordan
• Northern Utah County
If you owe more money than your home’s sales price, then you’ll need to look into selling your home as a short sale. No one wants to have to sell their home short but it will help you avoid foreclosure which is financially devastating to one’s credit score and history.
Let’s take a look at the short sale process…
If you owe more than your house is worth, then your only option is to sell your home as a short sale or else enter the foreclosure process. A short sale is when a mortgage lender agrees to a sales price that’s lower than the amount that you owe on the house. This gives you a chance to avoid foreclosure, and you no longer have an outstanding balance looming over your head. So, all debts owed on the house are settled or re-negotiated. But you’ll need to know this about sellingas a short sale:
Make sure that you will not owe a remaining balance after the deal is signed. Some mortgage lenders will not agree to pay off the remaining balance of your home loan. You’ll need to get it in writing.
A short sale will be a negative on your credit score. Make sure you have a rental agreement or some other housing option complete before signing a short sale deal. After the short sale is complete, your negative credit score will make it difficult to obtain financing for another home or even a rental.
A short sale is possible only if the lien holder (mortgage lender) is okay with accepting less than the owed amount on the debt and also agreeing to a sales price that is at or below the appraised property value. Creditors can hold a lien against your home in the form of primary mortgages, second mortgages, home equity lines of credit (HELOC), mechanics liens, IRS liens, state tax liens, and homeowner association liens.
So, you can see how the short sale is more beneficial than going into foreclosure. Short sales became popular alternatives as far back as 2008 when the housing market collapsed. Both foreclosures and short sales negatively impact your credit, but with a short sale the impact is less because you’ve shown responsibility by proactively selling your home short.
If foreclosure may be in your future, get your free no obligation cash offer today with Thomas Heyward and see what we can do to help you sell your home fast.