Being on the brink of a foreclosure can be a very stressful situation for any homeowner. Most people just want the whole thing to be over as soon as possible, and might make mistakes that can be very expensive in the long run.
Usually, a foreclosure is a sign of larger financial issues that need resolving urgently. With the economic recession of the last few years reaching new lows due to the coronavirus pandemic, many homeowners suffered enormous financial losses and found themselves suddenly at risk of foreclosure. So, if you are wondering how to avoid foreclosure, you are certainly not alone.
Besides the obvious risk of bankruptcy and losing your property without any compensation, a foreclosure can bring all kinds of financial harm your way. If you just let the bank go through with the foreclosure, not only you will find that your credit score is badly hit, but you will also owe more money than before on various fees and charges.
The easiest (and possibly best) alternative, of course, is selling the house. We’ll get there, but before that let’s study how to avoid foreclosure or at least buy some time. At Construct, we are one of the leading construction companies in Memphis Tennessee, and we have wide experience in the real estate market. Let us help you out!
In a hurry? Looking to sell your house and get rid of your mortgage? Don’t worry, at Construct we want to help find solutions for everyone.
Reach an agreement with the bank
Sometimes, finding out how to avoid foreclosure can be as easy as just answering the phone, or going directly to your bank and asking what can be done to delay or avoid the impending foreclosure. Usually, banks and lenders have contingency plans for this kind of situation, and will probably be glad that you are willing to negotiate how to pay your debt, even if it takes a longer time than expected.
Consider that when a lender has to foreclosure a house, it’s trying to minimize losses. It will lose money and selling a foreclosed home will only cover a fraction of the debt, but they rather have that than nothing. So, you have some leverage in the situation, and if you can prove that you are willing to pay the debt they might offer you some alternative that will benefit both.
Freeze the interest rate
If you have an adjustable interest rate, you might be able to convince the lender to freeze the rate until you are over the rough spot and can resume normal payments. However, this means that you will still have to pay your owed months to avoid foreclosure.
Refinance your loan
Another option is refinancing your loan entirely. If you are halfway through your loan, and you are able to keep making monthly payments but can’t cover already owed payments, the lender may be willing to add this amount to your loan. However, refinancing is like getting a new loan, so new terms will probably apply.
File for bankruptcy
One of the common solutions that are brought up when assessing how to avoid foreclosure is filing for bankruptcy. This can actually stop a foreclosure from happening and buy you a couple months of time, but you really should get a lawyer specialized in bankruptcy to avoid making costly mistakes. Also, you normally can’t file for bankruptcy if you already have filed within the last 7 years.
How to avoid foreclosure the best way? Sell your house!
No homeowner likes to consider this alternative, but it just might be the better option for your financial health both short and long-term. Not only can you save your hard-earned credit score, which can decrease by as much as 200 points due to a foreclosure, but this way you will also avoid any other fees and charges associated with the execution and auction of your home.
Think about it, with the money you save you can start over again with your credit unharmed and even get a new mortgage or loan better adjusted to your income. If this is you, don’t wait around until the last minute, every day that goes by the worse your debt will become.
We know that selling your home seems like a cumbersome process, and dealing with realtors isn’t easy, but it doesn’t have to be this way. With Construct, we can give you a cash offer and close the deal in no more than three weeks! You get to walk away with cash in your pockets and the freedom to start again anywhere you’d like.
Selling in a rush still seems like a bad idea? Don’t worry, we proud ourselves in giving honest and fair deals for everyone, and we will always buy your property at current market prices. We work individually with each homeowner to help them with their unique situation, and no matter the state of your house we buy ‘as is’, meaning you don’t even need to sweep the floor!
Sell your house with The Construct Company
We are one of the biggest construction companies in Memphis Tennessee involved in acquisition and property redevelopment, but we like to think that we are in the business of improving life for everyone. We love to buy old or shabby houses and give them a full renovation.
When we buy from you, we’ll give you a fair and square cash offer based on the expected market value of your home after a full renovation, discounting renovation time and costs. And you don’t have to spend a single cent on repairs. But, how does it work?
First, we schedule a charge-free visit where we assess the state of your property and you can tell us all about your current situation and preferred selling timeline. Then, we evaluate the key factors that affect the market price of your home and give you an honest cash offer. You are under no obligation to accept our offer (and there are no fees involved!), but if you like what you hear, that’s it. And we can close the deal in as little as three weeks!
