What To Do When Your House Is In Pre-Foreclosure
What To Do When Your Des Moines House Is In Pre-Foreclosure? If you're facing difficulties paying your mortgage, you're not alone. With the current high-interest rates, unemployment ticking upward, and high costs of goods due to inflation eating away at your earnings - many individuals are struggling to make ends meet and are forced to make tough financial decisions. When mortgage payments are missed, it's only a matter of time before the lender sends a notice of default and begins the pre-foreclosure process, typically after three missed payments.
But don't despair; there is still hope. The lender would still need to take legal action against you, and you can still work to prevent your property from being foreclosed. The simplest solution is to pay off any missed payments, including any accrued interest, but this may only sometimes be feasible. In some cases, it may even be possible to keep your home. Regardless, there are ways to avoid foreclosure that won't devastate your credit score.
When you receive a notice of default, and your home is in pre-foreclosure, there are several steps you can take to try and save your property. It's essential to act quickly and explore all available options to minimize the impact of the pre-foreclosure process on your financial situation.
Facing pre-foreclosure can be a stressful and overwhelming experience, but it doesn't have to be. The good news is that several options are available to help you.
Understanding Pre-Foreclosure
Pre-foreclosure is a stage in the mortgage process where the lender has issued a notice of default because the borrower has failed to make the mortgage payments on time. The lender may start selling the property to recover the debt owed, but the homeowner still has options to avoid foreclosure and keep their home.
Request a Loan Modification
One option to consider is negotiating a loan modification with your lender. A loan modification is a change to the terms of your mortgage, such as lowering the interest rate or extending the loan term, that can make your monthly mortgage payment more manageable.
To begin the process, you'll need to contact your lender and provide documentation of your financial situation. This may include proof of income, expenses, and any other debts you may have.
Refinancing Your Mortgage
Refinancing your mortgage involves taking out a new loan to pay off your current mortgage. This can be a good option if you have improved your credit score or interest rates have decreased since you took out your original mortgage.
Refinancing can lower your monthly mortgage payment, reduce your interest rate, and shorten the length of your loan. However, it's important to remember that refinancing typically requires closing costs and other fees.
Talking to a Housing Counselor
If you're facing pre-foreclosure, it's important to get professional help. Housing counselors can provide free or low-cost counseling to help you understand your options and plan to avoid foreclosure. They can also negotiate with your lender on your behalf and help you navigate the process of loan modification or refinancing.
During the Pre-Foreclosure Process, Sell Your House
Selling your home may be your best option if you cannot keep up with your mortgage payments. You can sell your home either through a traditional sale or a short sale. You can then use the proceeds of that sale to pay off your debt.
A short sale can be an option if you need help to keep up with your mortgage payments and want to avoid foreclosure. A traditional sale involves finding a buyer and completing the sale process like any other home sale. On the other hand, a short sale is when you sell your home for less than the amount owed on your mortgage. This process requires approval from your lender, and it also is up to the buyer to find a real estate agent to list the property. Short sales can take a long to close because many would-be homebuyers are wary of short sales.
You can also list the house on the larger real estate market if you can get enough cash from the sale to pay off what you owe on time. Again, this can be a long process; often, time is not on your side when it comes to pre-forclosure.
Finally, Des Moines homeowners in pre-foreclosure or foreclosure have another option. You can sell your house directly to an all-cash buyer like DSM Real Estate Buyers. We will work with you every step of the way, meet you to discuss your situation, view your property and give you an honest assessment of your current situation. We will give you a fair cash offer for your property so you can move on with your life.