Pre-foreclosure is the first step in the foreclosure process when a homeowner has fallen behind on their monthly mortgage payments. In most cases, pre-foreclosure starts after missing payments in the last three to six months. However, there are some lenders who will start the pre-foreclosure process the same month as the first missed mortgage payment.
The first step of the pre-foreclosure process is sending a default notice. This is how the repossessing of a property begins. Once you receive a Notice of Default letter, you have the opportunity to bring your mortgage up to date by paying off the debt and other late fees. If you cannot afford to pay your missed monthly payments, then your lender will start the foreclosure process, and you will most likely lose your home. Moreover, foreclosure destroys your credit report, so you will not be able to receive another loan within the next seven years. Here at We Buy Houses Jackson, we know there is help out there. Here are some of the more common ways people find help with pre-foreclosure.
What Can You Do If You Are Facing Pre-foreclosure?
If you are facing pre-foreclosure, you need to act as fast as possible to avoid foreclosure and losing your property. Here is what you can do.
Loan Modification
This is an effective method that will help you save your property from being foreclosed on. If you are struggling with your monthly payment, you should talk to your mortgage lender as soon as possible and discuss the possibility of loan modification. It is better not to wait too long and contact your lender right after the first payment is missed. Your lender may agree to extend the length of your loan, so you will pay less every month. The lender may also agree to lower the interest rate.
Deed in Lieu
A deed in lieu is a process in which you deed your home back to the lender in exchange for the cancellation of the unpaid balance. Unfortunately, just like foreclosure, a deed in lieu will have a negative impact on your credit. As a result, you may not be able to receive any other loan or purchase another house within the next couple following years.
Refinancing
This is the process of securing a new mortgage that you will be able to use to pay off the existing mortgage. It is a good method for those who want to reduce their monthly mortgage payments due to unexpected life events and changes in their financial situation. If you think it is a good option for you, you should contact your lender first because they may have additional options for you.
Paying the Remaining Balance of the Mortgage
One of the best things you can do is to pay the outstanding balance and all late fees. If you begin paying, most lenders will stop pre-foreclosure. There is also a chance your lender will offer you a payment plan. Again, you will not find out until you ask your lender. There may be other options available.
Short Sale
A short sale is when a homeowner sells the property for less than what they owe on the mortgage. It is important to note that a buyer’s offer must always be approved by the bank first before the sale is completed. Most lenders agree to a short slate because it allows them to save their time and money.
Sell Your House Fast to a Cash Buyer
A short sale is not the only option for selling your property. If you are already facing pre-foreclosure, the fastest way to sell your house is to sell it to a cash buyer. If your property is located in Jackson, MS, or any other nearby area, and you want to sell it immediately, make sure to contact We Buy Houses Jackson. We buy houses fast in any condition and under any circumstances, including pre-foreclosure. Therefore, if you want to sell your house fast, do not hesitate to contact We Buy Houses Jackson.
