What is a foreclosure? A foreclosure is when the bank decides that they no longer want to work with you during your most vulnerable moment. It's a legal process in which your lender will attempt to auction your home to recover the balance of the loan. In most cases that loan balance payoff will include some ridiculously high lawyer fees. So let's explore some options that may be available to get you out of a foreclosure situation along with some pros and cons of each.
FORBEARANCE: Sometimes you can get what's called forbearance. With a forbearance agreement the bank may allow you to make reduced or 0 payments for a good amount of months. The pros of the forbearance of course is the fact that you can delay payments for a while. The con is you will have to make up those payments when the forbearance ends. REFINANCE: Refinancing is a great way to get a fresh start. When you refinance a lender will pay off your old loan along with fees on your account and give you a brand new loan on your home. The pros are you get a new start to get back on track. The cons are banks rarely refinance once you're late on a mortgage payment.
REPAYMENT PLANS AND LOAN MODIFICATIONS: Some banks allow repayment plans and modifications if you're not too far behind on mortgage payments. Pros are you can get back on track. Cons are some banks will make it impossible and purposely delay the time in order to sell at auction. BANKRUPTCY: A chapter 7 or 13 is a drastic step to buy yourself enough time to catch up on payments. Pros are bankruptcy can delay a foreclosure sale but in most cases you have to file before you get behind on payments in order to save your home. Cons are bankruptcy will negatively impact your credit for years and a judge still may force a sale to satisfy other debts.
LEASE BUY BACK: A lease buy back is a unique owner finance agreement structured by "Private Property Buyers". Similar to a refinance, in a lease buy back, our company will pay off your lender and offer you a lease with the option to buy. Our lease terms are structured conveniently to fit the budget and pay scale of the resident. Pros are you can quietly discreetly stay in your home and get funding fast without any hassle, credit check or extensive waiting period. You basically can come up with an agreement that works and simply stay in your home while eliminating the chance of an auction. The fees are almost always less than private lenders which could take weeks or months to find. The cons are some people would rather sell.
SELL THE PROPERTY: Selling the property when the payments are too far behind or the repairs are too costly is sometimes the hardest and wisest decision a home owner can make.
Even though it's possible to have an emotional attachment to a home it's far more important to sell for a profit. If you wait too long the bank will take your house, completely ruin your credit and put you out on the street. Most investors looking to buy will offer you close to nothing for your home. Here at Private Property Buyers, we have a system that allows us to offer far more for properties than our competitors. Pros are you can leave the situation with money in hand, keep your credit intact and still be able to get a mortgage again. The cons are you will have to leave your residence.
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