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Help for Homeowners in Pre-foreclosure
Pre-foreclosure is the first step in the process of foreclosure. Facing foreclosure is probably one of the scariest experiences in every homeowner’s life. It usually occurs when the homeowner is at least three months delinquent. It is also important to note that pre-foreclosure does not always mean that the property will be taken. If a homeowner pays the debt off, he or she can keep the property.
What Can Be Done in Pre-foreclosure?
If you are facing pre-foreclosure, here is a list of options you can choose from to address the issue.
Modify the Loan
A loan modification is an action that prevents a property from being foreclosed. It is usually the perfect option for those who are struggling with their usual monthly payments.
One of the most common types of loan modification is extending the length of the loan so that a homeowner is provided with more time to pay off the loan. Sometimes, this also allows the lender to lower the rate.
Negotiate With the Lender
If you are a homeowner, and you are late with your payments, one of the first things you should do is to talk to your lender. The lender may be willing to provide you with a special repayment plan so you can continue making regular payments. Most lenders are open to negotiations because they also want to avoid foreclosure.
Pay the Remaining Balance
In most situations, pre-foreclosure and foreclosure processes will stop once the remaining balance is paid. If you cannot pay the entire remaining balance, it is recommended to contact your lender to discuss it.
Consider a Deed in Lieu
A deed in lieu is a voluntary agreement between you (as an owner) and your lender in which you voluntarily transfer the title to the property back to the lender in exchange for releasing the mortgage. The key to a deed in lieu is that both sides must enter this agreement voluntarily and in good faith. For this reason, not all lenders like this option and prefer to choose other more reliable options.
Think About Refinancing
Refinancing is a process in which you pay off your current loan with the proceeds from a new loan. You can acquire refinancing either through your current lender or through someone else. In general, refinancing is a great option, and it has been used by many couples and families. However, there are several things that need to be taken into consideration when you are thinking about this option, including the type of home and the current status of your mortgage.
Conduct a Short Sale
If you tried a loan modification and refinancing, and these options did not work, conducting a short sale may be the best option. A short sale is when the homeowner sells the property for less than they owe on the mortgage. In most cases, it is a private transaction between the homeowner and the buyer, but it must be approved by the bank first before being completed. When talking about a short sale, it is important to understand that even though it is an effective way to stop pre-foreclosure and avoid foreclosure, it has a negative impact on your credit score.
Sell the Property to a Cash Home Buyer
Another effective way to stop pre-foreclosure and stop foreclosure is to sell your house fast to a cash home buyer. Cash buyers purchase all types of properties and pay cash. They do not care about the condition, location, or age of the properties — they purchase them anyway. The best thing about this option is that you can close the deal within two weeks and receive cash.
If you are looking for a reliable and trustworthy home investment company in Dallas, TX, or any other nearby area, you should contact We Buy Dallas Houses. We buy houses immediately to help homeowners avoid foreclosure. If you have any questions, or you want to get more information about the process, feel free to contact us.
