There are serious consequences to going into foreclosure. Not only could you become responsible for large fines, penalties, and legal costs, but you could also find yourself unable to purchase another home for years. Foreclosure is always the last thing you want to happen, but many feel powerless to prevent it. You shouldn’t; there are still options available. Here is how to prevent foreclosure:
Your Lender Can Sometimes Help
When people are late on their mortgage, they often stop talking to their lender entirely. It’s understandable. But the lender already knows that they aren’t paying their mortgage. There is nothing to be gained by not talking to them.
Sometimes your lender can help. If you are temporarily behind on your loan, they can re-age the loan by putting the months you were late at the end of your loan. You’ll still need to pay them, but later. They may also be able to give you some additional time to pay.
But not all lenders are friendly.
You May Be Able to Sell Short
If your lender won’t modify your loan in any way, you may still be able to sell short. Ask your lender if they will approve of this. Selling short means you sell your home for less than you owe on it. It means you can sell your house faster to get out of a loan that you may just owe too much on.
Not every lender will approve a short sale, but they don’t want you to go into foreclosure either. A short sale means you can avoid some of those painful legal fees and the damage to your credit, though you are going to have to pay taxes on the amount that they forgive.
You Could Refinance Your Loan
If you’re going into foreclosure because your loan payments are too high, it’s possible to refinance your loan. Think about this: If you have a 30-year loan, but you’ve already paid 20 years of it, you could refinance to another 30 year loan. Your loan will be reset in terms of time, but your monthly payment will be much lower.
Of course, there’s an obvious problem: If you’re in this situation, you probably don’t have the best of credit. You may need a cosigner to be able to refinance at all. You can ask your current lender if they would be willing to increase the length of your loan.
Or You Could Declare Bankruptcy
It’s a last ditch effort, but declaring bankruptcy does stall your foreclosure proceedings. It actually stalls everything. But it’s not likely to be a long-term solution unless you think you can pay for your home as long as your other debts are eliminated. Bankruptcy will hit your credit report for as long as a foreclosure and could cause serious damage to your options in the future, so it’s not something to be taken lightly. But if you think you could handle your home payments absent any other debt, it’s a possibility.
With all that being said, there’s a simpler answer that’s often better …
Sell Your House Fast
The most direct and easiest way to prevent foreclosure is to sell your house as quickly as possible. The faster you sell, the faster you can move on, start rebuilding your credit, and start saving for the house that’s right for you.
Going through a cash-buying service like Purple Mountain Holdings is one of the most direct ways to sell your property fast. We purchase homes in cash without needing appraisals and inspections. You don’t need to remodel or update the house. You don’t even need to paint it!
A foreclosure costs you both time and money. And the money that it costs you can be more than you think, in terms of lost opportunities due to your damaged credit. If you want to be able to move on from the situation now and start saving for the future again, it’s best to sell your property quickly, before the foreclosure process begins.
Do you currently have a property that is approaching foreclosure? Do you need to stop that foreclosure fast? Contact Purple Mountain Holdings to get started.