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The Truth About Pre-Foreclosure in Houston
Learn the Truth About Pre-Foreclosure in Houston
Many Americans including those in Houston are facing unprecedented financial challenges like pre-foreclosure in Houston. This is partly contributed by the coronavirus pandemic that has left millions of people jobless.
Consequently, it has become difficult for many people to meet their monthly mortgage obligations much less spend the money needed on repairs and updating.
What Is Pre-foreclosure?
Most financial institutions normally issue a warning when a homeowner fails to pay his or her mortgage payments for a period of 3-6 months.
The warning is to notify the homeowner to either continue paying the mortgage installments or risk losing his or her home. This period is referred to as pre-foreclosure.
Mortgage lenders and banks usually give borrowers three months so they can become current. However, this period may sometimes vary depending on each financial institution and the circumstances.
If a homeowner doesn’t make the payment within the stipulated period, then the bank or mortgage lender will go ahead and foreclose the home. This means that the ownership will automatically be transferred to the bank and an eviction order will be issued.
Pre-foreclosure in Houston is not a new thing. There are instances where homeowners have been issued warnings and still failed to make monthly payments.
Fortunately, during the process of foreclosure, there are several opportunities a mortgage lender can take advantage of to prevent losing his or her home.
Options Borrowers Have for Pre-Foreclosure in Houston
If you have defaulted on your mortgage payments, you are likely to receive a warning from your lender.
However, there’s no reason to panic because you still have several options to salvage the situation.
These options will help you to stop or delay losing your home:
- The first option is to sell your home to a reputable real estate company in Houston and use the money to make all the payments owed to you. You can also talk to the real estate company to help you clear the payments and agree on how to pay them back.
- The second option is: In case your mortgage is “above water”, implying that there’s equity in your house, you might be able to refinance your mortgage so that you can get lower monthly payments.
- Another option is to talk to your lender or bank to request them to permit a short sale. In this case, you will be allowed to sell the house below its value and the lender will cover the loss as a tax write-off.
- Lastly, file for bankruptcy. Declaring yourself as bankrupt will give you more time to pay your debt. Nonetheless, bankruptcy will have a long-term negative effect on your credit souse this as a last resort.
In case you don’t take advantage of the above options, the bank or mortgage lender will have no choice but to auction your home. An auction normally starts with the lowest amount owed to the loan. The bank will finally sell the foreclosed home to the highest bidder.
Some people research the question “what is pre-foreclosure” and still fail to understand how it can affect them. In short, pre-foreclosure is a period where the bank reminds you to make mortgage payments after defaulting for several months. It is important to take appropriate action as soon as you receive the warning. Consult legal help and determine what your best option is. If you choose to sell your home, give Flash Realty Solutions a call and see how we can help you to save your credit and potentially even have cash to use towards other debts, rent or a new home.