If you’ve missed several mortgage payments, you may have gotten a notice from your lender informing you that your property is in pre-foreclosure. As local homebuyers in Chattanooga, we often get asked exactly what this letter means. If nothing is done, you may lose your house permanently. While pre-foreclosure is a severe issue, there are steps you may take to get your home back. Understanding the meaning of foreclosure and the choices available to you when in pre-foreclosure might help you avoid losing your house, and being informed to take the best course of action if your house is in pre-foreclosure.
What is the process of pre-foreclosure?
The pre-foreclosure procedure consists of many phases that begin when you fail to make your monthly payments. When you take out a mortgage and purchase a property, you agree to make monthly payments against the loan balance. If you miss payments, you’re breaking your agreement with your lender.
What should I do if my house is in pre-foreclosure?
The first phase in the foreclosure process is pre-foreclosure. Its goal is to allow homeowners to stay in their homes before they are foreclosed on. Pre-foreclosure happens when a homeowner fails to make mortgage payments, resulting in a notice of default from the lender. This is a formal notification from the lender indicating that the foreclosure procedure has commenced.
Pre-foreclosure is crucial because the lender may be willing to work out a deal on the borrower’s past-due obligation. Before a final foreclosure eviction, the borrower often has one last option to possibly alter the default status by making up late payments, negotiating a modification, or deciding to sell the home.
What is Being in Default Mean?
You will be in default if you skip three months of payments, and the foreclosure procedure, on the other hand, is extremely costly for banks. Lenders will usually work with homeowners to reduce payments, postpone payments, or restructure the loan. If a homeowner requires more assistance with their mortgage payments, foreclosure mediation is one possibility. You’ll get a notice of default after three to six months of missing payments and no evidence of redemption. This is a written notice from the lender that if the debt is not paid, legal action will be taken.
Try to make up for any payments that have been missed
Mortgage borrowers may still have alternatives in pre-foreclosure, such as paying backdated payments, negotiating a modification, or arranging a short sale. The first thing you should do is catch up on all of your missing payments. Most lenders will suspend the pre-foreclosure process if you can catch up, pay any late fees or penalties, and make regular payments.
Can I Sell My House in Pre-Foreclosure?
You can also sell your house in Chattanooga during the pre-foreclosure process, but you want to make sure you go with an option where you can sell your house fast. If you have equity in the home, consider selling to a cash home buyer in Chattanooga. If you’re in pre-foreclosure, most lenders will also accept a short sale. When you can’t sell your house for more than the amount owed on your loan, it’s called a short sale. Banks accept because it saves them time and money in the process of foreclosing on a property. It gives you influence over the pre-foreclosure procedure. The downside is that you will have to leave your house.
It’s possible that selling your home and moving on is the best option for you. If you can’t envisage a future in which you can easily resume making your mortgage payments, it might be time to let go of the anxiety. One thing to bear in mind is that they develop and sell homes on a daily basis. If selling your home is your best option, we’d want to provide you the option of doing so without worry. You’re already dealing with a lot of pressure in your life! Find out more about our home-buying process.
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