When financial hardship hits, it will affect many aspects of your life and it will likely have a negative effect on your mortgage situation, if you own a house. It may push you into foreclosure in Virginia.
Foreclosure is defined as a situation where the home owner has fallen behind on paying off the mortgage and the loan company has begun the process to take back ownership of the property and recoup its losses.
If you find yourself entering the foreclosure process, we are sure you’ll wonder what can you do about it, or even how to prevent it from even happening in first place.
In this post, you will find out about new foreclosure prevention measures in Norfolk which you can employ, to try to prevent your home from going into foreclosure.
Foreclosure prevention measures in Norfolk Virginia
The options below may not work in all situations, but one of several of them can be used to help you fight going into foreclosure:
1. Pay off your mortgage / sell your property.
The quickest fix is to sell your house and pay off your mortgage. The bank will love this option, but we know it’s not always a easy decision to do that. You can sell your house to an investor like us for cash. We will either pay off your mortgage or we will assume the payments for you. Call us and we will let you know how this works. If your loan balance is low enough you may be able to even get some extra cash for your self after the bank is paid off. There is another reason this is a good option – you will not damage your credit if you do this!
2. Work out a deal with your bank.
In some cases, the bank will work with you and set up some type of a payment arrangement, but you will need to find a way to become current on your mortgage. From there, the bank may agree to change the payment structure and offer lower monthly payments for you. Just make sure whatever you agree to is something you can deliver on and not end up again in a situation where you cannot keep up with the payments.
3. Do a short sale.
This is a set up where the bank would agree for you to sell the house for less than what is owed on the mortgage. In this case, the house will be sold to a third party, the proceeds will go towards satisfying the loan. In some cases, the bank may take that amount and close the loan, but in some others they will ask you to pay extra to a certain amount that the bank will accept before the loan is satisfied as paid in full. For a short sale to happen, the bank must approve the transaction before it happens.
4. Give your deed in lieu. Another option would be a deed-in-lieu-of-foreclosure, which basically means that you will hand over the deed to your house to the bank and they agree not to put you through foreclosure. This will often only work if your house is worth approximately the amount owing on the mortgage. If not, the bank may pursue the difference.
The next option here is deed-in-lieu-of-foreclosure. It means you give the deed to the bank and they agree not to pursue foreclosure. This will work well if your house is worth exactly what you owe, or more. Of course, if the house is worth more, then you will lose on this deal. On the other hand, if you owe more than what the house is worth, the bank will likely pursue you for the difference. Call us, we’ll review your situation and advise you on what your options are.
5. File for bankruptcy.
This is your last resort. It gets all creditors off your back, including the bank. The downside is, your credit will be affected for many years. It will be hard to get a new loan, rent, get a job, etc. This option has a profound effect on your whole life. We do not recommend it, unless it is absolutely necessary. And yes, it will stop foreclosure too.
We understand that it may be hard to choose which way may be better for you. Here is one idea – if you can make a new agreement with your bank and you can afford the mortgage payments and you want to stay in the house, in this case a foreclosure workout arrangement (#2) is your best option.
If you want to finish this off completely and move on as soon as possible, then consider selling your home and paying off your mortgage with that money.