4 Reasons to Sell Before Foreclosure
If you are behind on your mortgage payments and facing foreclosure, you may still have an opportunity to sell your house before the foreclosure takes place. You will get plenty of warning letters and calls from the bank before the foreclosure process actually happens. Use this time to sell your home and avoid some of the negative repercussions of the foreclosure.
Here are a few reasons to sell before foreclosure, according to the distressed home buying experts at PropertyLark:
1. Salvage Your Credit Rating
Your credit score is probably already taking a hit by missing mortgage payments. And, the damage can be much worse for your FICO score if you let your house go into foreclosure. When the bank or mortgage lender seizes your property, it will add a major negative mark on your credit rating. This may make it difficult for you to borrow money in the future, qualify for credit cards, buy cars, etc.
2. Future Home Buying Potential
You may be losing your current home because of financial problems, but you may have dreams of buying again in the future when things are better for you financially. Unfortunately, you will have to wait a specified period before you can even qualify for another mortgage loan. Lenders are less willing to take a chance on a home buyer who already went through a foreclosure (regardless of your current financial status), and there are set waiting periods in place depending on the type of home loan you want to get:
- FHA Loans: 3 Years
- Fannie Mae/Freddie Mac Loans: 7 Years
- VA Loans: 2 Years
- USDA Loans: 3 Years
- Conventional Loans: Waiting Period Can Vary By Lender
3. Financial Outcome
If you take initiative and sell your house before foreclosure, you may be able to achieve a better financial outcome compared to what will happen with the foreclosure. Your best bet is probably to sell to a cash home buyer like PropertyLark who can get you out from under the financial burden of your home as quickly as possible. Depending on what you still owe and what your house is worth in the current real estate market, you may even be able to come out a little ahead. At the very least, you can minimize what you still owe. Otherwise, the bank will seize your property and leave you in a much worse position, even after they sell it.
4. Personal Impact
There is nothing enjoyable about losing your house to a foreclosure. It can be emotionally difficult on many levels. Selling before foreclosure won’t completely remove these feelings, but it won’t be quite as bad. A foreclosure is a more public way to lose your house. Your other option is to get a cash sale completed privately and discreetly, so you can move on with your life.
These are just a few reasons why it makes a lot of sense to sell your house before foreclosure if you still have time. The bank will give you every opportunity to pay what you owe or work out other solutions, and you likely have the option to sell quickly before the foreclosure actually begins.
If you want to get a fast and fair cash offer for your house, contact PropertyLark. Simply fill out the form on the right to get started!