Understanding foreclosure is something no one ever really wants to have to look into. The idea of foreclosure is extremely unpleasant. Instead of moving on from a bad situation on your own terms, it mainly features the court forcing you out of what you thought was going to be a milestone in your life. We’re here to guide you through what you need to understand about the nature of foreclosure and pre-foreclosure so that you can navigate the next couple of months with grace and survive this unfortunate situation.
In life, there are ups and downs and some of those downs happen to catch you when you need to pay a mortgage. Know that it’s not uncommon and there’s a very set procedure for all of the processes surrounding foreclosure.
When a homeowner doesn’t get in a mortgage payment for anywhere between 3-6 months, the lender that holds the mortgage will send out a warning paper by snail mail to notify that the bill needs to be paid, or the previously mentioned homeowner will lose their home. Most banks and lenders offer around three months to become current on a loan before they proceed with the foreclosure process. Remember, it’s in their interests to keep you paying your mortgage as it costs them quite a bit of money to embark on the court proceedings for a foreclosure. Depending on the situation and bank, you can sometimes expect different timelines while you’re in pre-foreclosure.
If the homeowner fails to make the rest of the payments within the timeline allotted during pre-foreclosure, the house is likely then in foreclosure. The bank will assume ownership and then evict the current homeowner. During the foreclosure process, which is much longer the pre-foreclosure, the homeowner has a variety of options to evade the final result.
For example, if your mortgage is considered “above water” that means you have room to refinance to make the monthly mortgage more affordable. Essentially if you have equity in your house, or it’s worth more than what you initially paid now, you can start paying low monthly payments. A mortgage broker can help you access that option and reevaluate your mortgage situation to help you stay financially healthy easily.
If your home doesn’t have much in the way of equity, selling your house to a trustworthy real estate investor in Fort Collins could be your best option. They’ll be able to get you off without a single mark on your record if you pursue this option early enough. Even if you don’t most real estate companies, especially Colorado All Cash is prompt in getting you the balanced all-cash offer you need so that you can walk away from the foreclosure before it puts a black mark on your credit.
Otherwise, you’re options are limited to hoping that the bank will allow you to do a short sale where you may still have to pay off the banks loss in profit, or you can file bankruptcy. Neither are what we’d call preferrable options.
The Credit Consequences
If you foreclose on a house, it’s rather unlikely that you’ll be able to purchase a new one anytime soon. Even if you somehow gather the funds, you won’t be able to secure a mortgage until you’ve worked your way back up from a 200-400 credit point drop due to the foreclosure. It’ll likely prevent you from obtaining even small loans for the next 5-7 years including minor financing on cars. Thus, foreclosure is a major life event in that it could nearly permanently prevent you from acquiring the sorts of things you need to live. When you apply for apartment buildings to live in, your credit will be checked, when you need to purchase a new car they’ll check, and if you want to just grab the beauty store’s credit card to get a $100 off your purchase, they’ll check your credit and you likely won’t be able to get approved.
Stop Foreclosure In Its Tracks With Pure Cash
Colorado All Cash wants to help people access an escape when they need one. You don’t deserve to have your credit score destroyed simply because you missed a couple of mortgage payments. Let us help get you out of this issue. Contact us today and receive a balanced all cash quote on your property so that you sell your house, pay off your mortgage and start fresh without potentially life ruining consequences.