Worried About Losing Your Home? You Have More Options Than You Think!
There are a lot of Americans out there right now worried about losing their home to foreclosure. Federal relief bills, stimulus payments, mortgage forbearance plans and foreclosure moratoriums all helped throughout the pandemic. As these helpful laws start to fade away, some homeowners are worried about making up for missed/delayed mortgage payments, property taxes and other homeownership expenses.
Clearly the government understands there has been financial hardship for many homeowners. The lenders are going to be a little less patient. However, it is important to understand that banks don’t like foreclosures either. They often end up losing lots of money in the process.
Talk to Your Lender
Talking to your lender is the first thing you should do if you are already behind on mortgage payments or worried about missing upcoming payments. There may be back payment, forbearance, debt consolidation or refinancing options available to you. They might be willing to work with you if you are proactive about reaching out to them. Just remember that banks are far from charities, so they are still working with their own best interests in mind. If the solution doesn’t make them money or save them money, then it doesn’t make much sense.
Even if the bank is willing to work something out with you, it still may not be your best option. You could just be digging yourself into a deeper hole of debt and delaying the inevitability of losing your home in the future.
Consider Selling Your House
Depending on your situation, selling your house now may be the best solution. This is especially true if you have built up some good equity and aren’t upside-down on your mortgage loan. Even if you are upside-down, a quick sale may minimize the financial damage. Going through a foreclosure, short sale or bankruptcy will destroy your credit and make it harder to get any kind of loan in the future. It may be best to get what you can out of your house while you still own it.
Traditional Sale vs. Cash Sale
If you have time to go through a traditional real estate sale, it will usually generate the biggest returns. The property will fetch a higher sales value on the open market, where it will hopefully attract multiple offers. Just know that selling this way will take some time (usually a few months at least) and you will be faced with additional expenses such as repairs, real estate agent/broker commissions and closing costs.
Condition of House
Speaking of repairs, the condition of your house is important to consider. If it is in rough shape, you may have a harder time selling it on the open market and you certainly won’t get top dollar. You may end up having to invest more money into fixing it up before you list. These repairs and upgrades can often pay for themselves with a higher resale value and quicker sale, but they will cost money upfront and you won’t be able to list your home as soon.
Sell to a Real Estate Investor
Another viable option is to talk with a real estate investor or an investment network like PropertyLark. They can offer an all-cash deal that can be closed in weeks rather than months. They will also usually buy homes in as-is condition, so you don’t have to worry about costly repairs. You won’t get as high a resale price, but you’ll be able to sell sooner and get out from under your financial burden before it gets worse. Real estate investors may also be able to work with you on different seller financing options. There are some creative solutions that may net you better returns or maybe even allow you to stay in your home longer.
Don’t Wait Too Long
The point is you shouldn’t just do nothing and wait for the bank to come calling with a foreclosure notice. You should do everything you can to avoid foreclosure. The sooner you act and start exploring your options, the more options you may have.
If you would like to receive a no-obligation cash offer for your house, or if you want to discuss other selling or financing solutions, contact PropertyLark today. Simply fill out the contact form on any page of our site to get started!