WorldExecutivesDigest.com | What Does It Mean to Have a Pre-Foreclosure Home? | Currently, in the US, 1 out of every 12,448 properties are in foreclosure.
Foreclosure is a terrifying word for any property owner. Many families face foreclosure due to not having adequate financial resources, and they feel lost on what to do.
Before a home is foreclosed, the owner will receive a pre-foreclosure notice. It’s crucial not to ignore this notice. Take action immediately if you receive one.
Are you unsure what having a pre-foreclosure home means? Keep reading below for more information.
The Final Warning
A pre-foreclosure notice is one step before having a foreclosed home. It’s your last warning. That’s why it’s important to take immediate action.
An owner receives their pre-foreclosure notice once a lender decides to foreclose the home. However, pre-closure happens prior to the completion of the foreclosure process.
What Do I Do?
Take advantage of the pre-foreclosure stage, and reach out to your lender. Your lender may be willing to negotiate a new plan on mortgage payments.
Ask your lender about a loan modification. There are several options involved in a modification. These options may include extending the length of your loan so your payments become smaller, or the loaner may move your missed payments to the end of your loan payback period.
If you’re able to come up with the missed payments, it’s best to pay. This way, you won’t have to worry about extensions or making up payments.
Ask About a Short Sale
In the case your lender doesn’t agree to a loan modification, ask about a short sale. A short sale typically involves selling the home for less than what’s due in mortgage payments and allowing the bank to keep the sale money.
This option is obviously tricky because while you’ll be able to walk away from the sale debt-free, you also won’t have a home. Look at all of your options, including companies that buy houses in as is condition.
Look for Relief
If you’re facing foreclosure due to unemployment or the recent pandemic, take time to research grants that are able to help. Many people are able to find help through local or state government.
You might also try asking for trusted family members for help on payments if you aren’t able to find helpful resources. Working out personal loan agreements with family is much easier than working with a bank.
If you often have trouble remembering to pay bills, keep track of important payment dates using a planner or calendar. Get in contact immediately with your lender if you suspect having trouble in making a payment.
Handling a Pre-Foreclosure Home
It’s stressful handling a pre-foreclosure home so make sure to read the quick guide above. If you receive a pre-foreclosure notice, take action immediately.
Reach out to your lender to discuss a possible loan modification. If this isn’t allowed, talk to your bank about a short sale. Seek relief from local and state governments if you’re having trouble making payments.
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