Facing difficulty in making timely payments can be a daunting experience, especially when it comes to one’s home. If you find yourself struggling with your financial commitments, you might be wondering whether you will have to surrender your house to the bank in Twin Cities, Minnesota.
Losing your home is undoubtedly a distressing prospect, and the consequences can be severe and long-lasting, such as a significant negative impact on your credit score and your future ability to obtain a mortgage.
However, rather than waiting for the situation to deteriorate, there are proactive measures you can take today to safeguard yourself and work towards financial stability.
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!
Delaying action until your property goes into foreclosure can have severe repercussions on your credit rating. However, there is an option to safeguard your credit score by working out an arrangement with your loan company known as a “deed in lieu of foreclosure.”
This arrangement entails relinquishing ownership of your property to your loan company, which saves them from incurring significant expenses in foreclosure proceedings, and in turn, you can avoid having a foreclosure listed on your credit rating.
Selling your property before it gets auctioned off is another way to avoid foreclosure. If your loan is fully paid, there will be no more penalties against you, and your credit rating remains unaffected. Nonetheless, if your loan is not fully paid, you’ll have to make up the shortfall.
For instance, if you owed $100,000 on your property and sold it to us for $90,000, you would give the proceeds to your loan company, together with an extra $10,000 to settle the deficit, and your loan would be cleared. You may also reach out to a real estate lawyer, who may be able to negotiate a deed in lieu of foreclosure deal, where the loan company agrees not to pursue the difference in exchange for the property deed.
We are experienced real estate investors at Matt Buys Houses MN. We purchase houses in any condition, and we encourage you to contact us today at 612-293-3532 to learn more about what we can offer for your property.
I want to avoid giving my house back to the bank in Minnesota!
There are various reasons why individuals opt to sell their home instead of waiting for the foreclosure process to unfold, even though they may no longer reside in the property.
Firstly, while losing a home is emotionally challenging, the impact on one’s financial situation and credit score is significantly less than the damage caused by waiting out the foreclosure process. Foreclosure can lower your credit score by as much as 100 to 150 points, which can be catastrophic for your financial health.
Secondly, selling your home is a proactive step that enables you to take control of the situation and mitigate the damage caused by foreclosure. By selling your home, you may be able to recover some of the equity you’ve built up over the years, which can help you move forward with your life.
Thirdly, selling your home provides closure, allowing you to move on from the past and start afresh. Foreclosure proceedings can drag on for months, if not years, causing ongoing stress and uncertainty.
Fourthly, selling your home can save you from the possibility of a deficiency judgment. In some states, if your home is sold at foreclosure for less than the outstanding mortgage balance, the lender may pursue you for the difference. By selling your home, you can avoid this possibility altogether.
Lastly, selling your home can be a faster and smoother process than waiting for the foreclosure process to conclude. Foreclosure proceedings can be prolonged and complicated, whereas selling your home to a reputable real estate investor can be a simple and hassle-free process.
In conclusion, while losing a home is never easy, selling your home before foreclosure can alleviate the financial and emotional burden associated with the process. If you are facing foreclosure, consider selling your home to a professional real estate investor who can help you navigate the process and move on with your life.