With millions of homes across the country going into foreclosure, it’s important for both buyers and mortgage holders to understand the process.
So what is a pre-foreclosure in Dallas, Plano, McKinney, or Frisco anyway?
Many homeowners across America and Dallas, Plano, McKinney, or Frisco are facing difficulties making their monthly mortgage payments.
When a homeowner misses 3-6 months of mortgage payments, the lending institution will issue a warning, notifying the homeowner to pay or lose their home. This period is known as “pre-foreclosure.”
Banks and mortgage lenders typically provide three months for the homeowner to become current. Of course this number can vary by bank and situation sometimes.
Despite the possibility of foreclosure and subsequent eviction by the bank due to missed payments, homeowners can find solace in the fact that they have various options available to them during this crucial stage in the process, which can help them avoid losing their homes.
In light of the current economic landscape, lenders are acutely aware of the widespread financial troubles that many people are facing. Consequently, they are usually more than willing to work with borrowers who are experiencing difficulties and are unable to make their payments on time.
One of the most important things that borrowers can do when facing financial hardship is to be honest and open with their lender. If you communicate with your lender and make them aware of your situation, you’ll often find that there are a number of options available to you that will allow you to remain in your home or at least salvage your credit rating.
It’s important to remember that a foreclosure can have a devastating effect on your credit score. In fact, it can cause your score to drop by as much as 200-400 points. This can make it very difficult for you to obtain any kind of loan for several years after the foreclosure. For this reason, it’s crucial to be diligent if you receive a Notice of Default from your lender.
Fortunately, there are a number of steps that you can take to prevent foreclosure from occurring. For example, you might be able to work out a repayment plan with your lender or even refinance your mortgage. Alternatively, you may be able to sell your home and pay off your outstanding debt.
Ultimately, the key to avoiding foreclosure is to take action as soon as you realize that you are struggling to make your payments. By being proactive and working with your lender, you can often find a solution that allows you to keep your home and protect your credit rating.
Pre-foreclosure Options for Borrowers
If you’re behind on mortgage payments, you’re likely to receive a “notice of default” from your mortgage lender.
This document will state that you have not made mortgage payments for the last 90-180 days. It’s important not to panic.
You have options that can delay or even prevent losing your home:
- If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, receiving lower monthly payments. Check with your local Dallas, Plano, McKinney, or Frisco mortgage broker… or contact us and we can connect you with a reputable one.
- You may be able to quickly sell your home to a real estate investor that’s reputable in Dallas, Plano, McKinney, or Frisco like us at We Buy Houses Cash DFW, using the cash acquired to pay the months of back-payments owed (or we *may* be able to work out something with the lender that relieves all or part of your back payments.We can buy your Dallas, Plano, McKinney, or Frisco TX area home quickly, often in just a week or two, will pay in cash, and takes the stress out of trying to find a buyer.
- You can contact the bank and ask them to permit a short sale. In a short sale, you’ll sell your home for less than it’s worth, and the bank will take the loss as a tax write-off. In some short sales you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan.
- You may be able to declare bankruptcy, which can buy you time to pay your debt. Bankruptcy will remain on your credit report for years, and can cause significant damage.
Lenders are very much aware of the widespread financial troubles across the country and they’re willing to work with borrowers a lot of the time.
If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least salvage your credit rating.
A foreclosure can often negatively affect your credit score by 200-400 points and can prevent you from obtaining a loan of any sort for 5-7 years, so be very dutiful if you’ve received a Notice of Default from your lender.
But if you’re not able to find a solution with your lender working directly with them… connect with us. We may be able to help.
Ways We Can Help If You’re In Pre-Foreclosure
- We can potentially help with a short sale – Submit your info on this website so we can evaluate your situation to see if we can help.
- We can buy your Dallas, Plano, McKinney, or Frisco area house – We buy houses in Dallas, Plano, McKinney, or Frisco and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>
- You can ask us questions and we can provide you FREE guidance and resources so you can make a well educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch.
If you’re in the pre-foreclosure stage… you’ve still got time to fix this situation.
Just connect with your bank to see if they’re willing to work with you… or contact us if you’d like to see what we can buy your house for or to tap into our free foreclosure foreclosure resources.