Mortgages are a popular option when buying homes in Houston, TX. They enable you to live in your dream house while you make partial payments. Nonetheless, the lender may opt to repossess the property if you fail to repay the loan for several months consecutively. After all, the property is not fully yours until you pay the loan completely. The legal proceeding of repossessing the property is what we call “Foreclosure.” Different reasons can make you a Foreclosure victim. Maybe you’ve lost your job, or perhaps your business has collapsed. Regardless, it’s important to know how to get out of Foreclosure. To either stop or avoid the repossessing process, you should consider these four approaches:
1. Short Sale
A Short Sale refers to the option of selling the property at a value that is less than the mortgage. This is the best option for getting out of Foreclosure for most residents since it allows you to sell the house to a property company before it’s foreclosed on. However, you’ll need permission from the lender to sell the house to a home company. If the two agree, the lender cancels your debt, allowing you time to sell the property. You’ll be expected to aggressively look for a willing home buyer who will give you a fair quote.
2. Loan Modification
Before the property is foreclosed on, you can ask the lender to modify the mortgage’s terms and conditions. The lender may agree to give you an extension to repay the loan. Alternatively, the lender may lower the interest rates to accommodate your budget. For either option, you’ll be provided with a new payment plan.
3. File for Bankruptcy
Declaring bankruptcy gives you legal protection against property collectors. Since a Foreclosure is regarded as a collection activity, the law prohibits the lender from repossessing your property. Though this may seem like an easy way out of Foreclosure, it’s a reprieve as you search for a more permanent solution. Once you get a court, the bankruptcy trustee’s role is to act as a mediator or a referee between you and your creditors.
4. Forbearance Agreement
A Forbearance Agreement refers to a mortgage payment plan the lender sets to ease the mortgage burden. In most cases, the program is designed to suspend your payments until you are financially active again. If your hardship is temporary and you are hopeful of a quick bounce back, this is the best option for getting out of Foreclosure. Nevertheless, not all lenders have a plan, so you should ask about it.
Foreclosure can be a harrowing experience, especially for a family who knows the house to be their home. As you buy a property in Houston on mortgage terms, you must understand how to avoid a Foreclosure, which begins by adapting the above four approaches.
