“I’m behind in payments…will I be giving my house back to the bank in Front Royal?”
Losing one’s home is a distressing prospect. However, when financial circumstances become overwhelming, the burden of financial obligations may become too immense to bear. If your situation escalates, you might find yourself in the unfortunate position of relinquishing your house to the bank in Front Royal, VA, leaving you temporarily without shelter. Moreover, there could be enduring repercussions, notably a significant and enduring detriment to your creditworthiness (and your prospects of securing housing in the future).
Such an outcome is undesirable, and understandably, no one wishes to endure it. Fortunately, there exists a proactive strategy that you can implement today to safeguard yourself and pave the way for financial recovery.
Here’s a brief overview of the foreclosure process
The foreclosure process can vary depending on location and the type of mortgage you have.
Usually, if you miss a few mortgage payments, your loan company will start sending you notifications and then warnings. Over time, if you fail to pay back the mortgage payments you missed, the loan company may put your home up for public auction.
How long you can stay in your house after it is sold in auction depends on the state where you live. At some point, however, you will need to find a new place to stay.
Fortunately, you have options!
If you wait until your home is foreclosed, Experiencing foreclosure can inflict severe damage on your credit score. One viable solution to safeguard your financial standing is to negotiate an agreement with the loan company known as a “deed in lieu of foreclosure.”
This involves transferring ownership of the house to the loan company to prevent them from incurring the expenses associated with foreclosure proceedings, which can be substantial. In return, you avoid having a foreclosure notation on your credit report.
Another method to circumvent foreclosure is by selling your house before it is auctioned off. If the proceeds from the sale cover the entire loan amount, there will be no further penalties imposed on you, and your credit score will remain unaffected. However, if the sale amount falls short of the outstanding loan balance, you will need to cover the deficit.
For instance, suppose you owe $100,000 on your home and sell it to us for $90,000. You would then provide the loan company with the $90,000 from the sale proceeds and an additional $10,000 to cover the shortfall, thereby paying off the loan. (Alternatively, by consulting a real estate attorney, you may have the opportunity to negotiate a deed in lieu of foreclosure arrangement, whereby the loan company agrees not to pursue the remaining balance in exchange for receiving the deed to the property.)
At Five15 Properties, we’re professional real estate investors. Contact us today at (540) 212-4047 to find out what we can offer you for your house — even if it needs repairs.
I want to avoid giving my house back to the bank in Front Royal!
What are the reasons behind individuals opting to sell their home rather than enduring foreclosure, especially considering they are no longer residing in the property?
Although losing a home can be emotionally challenging, the repercussions on your financial stability and credit score are significantly less severe compared to waiting out the foreclosure proceedings. In reality, undergoing foreclosure could result in a substantial drop in your credit score, ranging from 100 to 150 points. Therefore, despite the immediate difficulties associated with selling your house, it remains a preferable option to the enduring repercussions of relinquishing the property to the bank in the long run.