With millions of homes across the country going into foreclosure, it’s important for both buyers and mortgage holders to understand the process.
So what is a pre-foreclosure in Wichita anyway?
Many homeowners across America and Wichita are facing difficulties making their monthly mortgage payments.
When a homeowner misses 3-6 months of mortgage payments, the lending institution will issue a warning, notifying the homeowner to pay or lose their home. This period is known as “pre-foreclosure.”
Banks and mortgage lenders typically provide three months for the homeowner to become current. Of course this number can vary by bank and situation.
If a homeowner fails to make the necessary payments, the bank will foreclose on the home and evict the homeowner. Thankfully, during this stage of the foreclosure process, a mortgage holder has the opportunity to take advantage of several options to prevent the loss of the home.
Pre-foreclosure Options for Borrowers
If you’re behind on mortgage payments, you’re likely to receive a “notice of default” from your mortgage lender.
This document will state that you have not made mortgage payments for the last 90-180 days.
But don’t panic! You have options that can delay or prevent the loss of your home:
- If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, receiving lower monthly payments. Check with your local Wichita mortgage broker, or contact us and we can connect you with a reputable one.
- You may be able to quickly sell your home to a real estate investor like Fast Fair Home Buyer, using the cash acquired to pay the months of back-payments owed, (or we *may* be able to work out something with the lender that relieves all or part of your back payments.)We can buy your home quickly, often in just a week or two, and we can pay cash to save you the hassle of waiting on a buyer or paying other fees.
- You can contact the bank and ask them to permit a short sale. In a short sale, you’ll sell your home for less than it’s worth, and the bank will take the loss as a tax write-off. In some short sales you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan.
- You may be able to declare bankruptcy, which can buy you time to pay your debt. However, bankruptcy will remain on your credit report for years, and can cause significant damage. So don’t take this option lightly.
If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least salvage your credit rating.
A foreclosure can often negatively affect your credit score by 200-400 points and can prevent you from obtaining a loan of any sort for 5-7 years, so be very dutiful if you’ve received a Notice of Default from your lender.
But if you’re not able to find a solution, get in touch with us. We may be able to help.
If you’re in the pre-foreclosure stage… you’ve still got time to fix this situation.
Just connect with your bank to see if they’re willing to work with you, or contact us if you’d like to see what we can buy your house for.