“I’m behind in payments…will I be giving my house back to the bank in Chesapeake?”
I know, nobody wants to lose their house. But, if you or a family member loses a job or income, things can get tough. If there is no prompt solution, one of the outcomes is to lose your house to foreclosure. At some point you may face such situation and will need to get some education and make the best choice given your options.
If the financial situation gets too far and you just can’t make the payments, you may end up having to give your house back to the bank in Chesapeake Virginia, leaving you possibly without a place to stay. Moreover, such situation will also have a long-lasting negative effect on your credit which will affect your ability to rent an apartment or get another house in the future.
That situation is far from good, but don’t fret, there are steps you can take to mitigate the effects of a pre/foreclosure that will help you get back on track faster on the road of financial recovery.
Here’s a brief overview of the foreclosure process
The foreclosure process will vary depending on your location and the type of mortgage you have.
If you miss several payments, the bank will start sending you notifications and then warnings. If the insolvency continues and you can’t become current on your payments, the bank may put your house up for a public auction.
You may be able to stay in the house during this process and maybe even after the auction is complete, but that will depend on the state rules and the bank’s stance on the situation. Nevertheless, you will then need to find a place to stay.
Fortunately, you have options!
Waiting and not doing anything while your home is foreclosed can have a detrimental effect on your credit. One option to protect yourself and your financial stability is to work out a deal with the loan company called a “deed in lieu of foreclosure”.
This means you would hand over the ownership of the house to the bank immediately and save them the money they have to spend on foreclosure proceedings, which is significant. And you may avoid having to get a foreclosure on your credit report.
Or, you can avoid foreclosure by selling your house to an investor (like us) before it’s sold at an auction. If you are able to get a cash offer from an investor to pay off your loan, or possibly the investor to take over your payments, you will save your credit rating!
Here’s an example: Let’s say you owed $100,000 on your home and you sold your home to us for $90,000. You would give that money to the loan company, along with $10,000 to make up the short-fall, and your loan would be paid off. (If you contact a real estate attorney, you may be able to negotiate a deed in lieu of foreclosure deal in which the loan company agrees not to go after the difference in exchange for the deed to the house. If you don’t have 10,000 to pay off the remaining ballance, the other option is to ask the cash buyer to take over payments of the total loan, if feasible for the investor. That way you have a couple of different options on the table where you don’t have to pay anything and you will save your credit!
I want to avoid giving my house back to the bank in Chesapeake!
Why do people choose to sell their home instead of going through foreclosure? (After all, they still won’t live in their home anymore.)
Yes, losing a home is very difficult, but the impact on your financial well-being and your credit is considerably less than if you simply wait and go through the foreclosure process. In fact, going through foreclosure could impact your credit score by as much as 100 to 150 points. In essence, selling your house before foreclosure is still a better choice than the long-term pain of giving your house back to the bank and ruining your credit if you do go through foreclosure.