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, when you fail to pay back the loan for several months consecutively, the lender may opt to repossess the property. 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.” There are different reasons that 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:
A Short Sale refers to the option of selling the property at a value that is less than the mortgage. To most residents, this is the best option for getting out of Foreclosure 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 of you agree, then the lender cancels your debt and allows 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.
Before the property is foreclosed on, you can talk to the lender and ask for a modification of the terms and conditions of the mortgage. The lender may agree to give you an extension to pay back the loan. Alternatively, the lender may decide to 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 the 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 Foreclosure, it’s just a temporary reprieve as you search for a more permanent solution. Once you get a court, the role of the bankruptcy trustee is to act as a mediator or a referee between you and your creditors.
A Forbearance Agreement refers to a mortgage payment plan that the lender sets to ease you of the mortgage burden. In most cases, the plan is designed to suspend your payments until you are financially active again. So, 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 the plan and so you should ask about it.
Foreclosure can be a harsh experience, especially for a family that has known the house to be their home. As you buy a property in Houston on mortgage terms, it’s imperative that you understand how to avoid a Foreclosure and it begins by adapting the above four approaches.