“I’ve fallen behind on payments… does this mean I’ll have to surrender my house to the bank in Belleville?”
Losing one’s home is a distressing thought for anyone. However, sometimes financial circumstances can change unexpectedly, and the associated commitments can become too difficult to handle.
If your situation worsens, you may find yourself in the regrettable position of having to surrender your house to the bank in Belleville IL, resulting in temporary displacement. Additionally, there may be enduring ramifications, such as a significant and long-lasting impact on your credit rating (as well as your prospects of obtaining a future home).
Such an outcome is far from desirable. However, the good news is that you can take preemptive measures today to safeguard yourself and restore financial stability.
Here’s a brief overview of the foreclosure process
The foreclosure procedure can vary depending on your location and the type of mortgage you possess.
Typically, if you miss a few mortgage payments, your lender will initiate a sequence of notifications and warnings. If you continue to neglect your outstanding mortgage payments, your lender may eventually list your property for public auction.
The length of time you can remain in your home after it’s been sold at auction is dependent on the state in which you reside. Nonetheless, at some stage, you’ll need to secure alternative accommodations.
Fortunately, you have options!
Delaying until your home is foreclosed upon can result in a significant negative impact on your credit score. One means of safeguarding yourself is to negotiate an agreement with your lender called a “deed in lieu of foreclosure.”
Under this arrangement, you relinquish ownership of the property to your lender, who will consequently save money by avoiding the expenses associated with the foreclosure process, which can be substantial. Furthermore, you’ll be able to sidestep the inclusion of a foreclosure on your credit report.
Another approach to circumventing foreclosure is to sell your home prior to it being sold at auction. If you can pay off your loan completely, you won’t face any additional penalties, and your credit score won’t be adversely affected. However, if your loan isn’t fully paid off, you’ll need to compensate for any outstanding amounts.
For instance, let’s assume you owe $100,000 on your property and you sell it to us for $90,000. You’ll then provide the loan company with the $90,000 and an additional $10,000 to account for the shortfall, effectively settling your loan. (If you engage a real estate lawyer, you may be able to broker a deed in lieu of foreclosure agreement in which the loan company agrees to forgo pursuing the discrepancy in exchange for the property deed.)
At Cardinal Creek Properties, we’re seasoned real estate investors, and we’re interested in purchasing your property, even if it requires repairs. Please contact us at (314) 467-8137 to learn more about what we can offer you.
I want to avoid giving my house back to the bank in Belleville!
Why do individuals opt to sell their property instead of undergoing foreclosure? (After all, they’ll still be displaced from their home.)
Although losing a home is undoubtedly distressing, the effect on one’s financial condition and credit rating is far less detrimental than merely allowing the foreclosure process to run its course. In fact, going through foreclosure could reduce your credit score by up to 100 to 150 points. Therefore, while the near-term difficulty of selling your house may be daunting, it’s still preferable to the long-term repercussions of forfeiting your property to the bank.