Unexpected financial hardship can lead to many homeowners failing to pay off their monthly mortgage. If left alone, this could result in you facing foreclosure for your Los Angeles property. This can have a huge negative impact on your finances, equity, and the status of your home.
In case you’ve missed a payment or are behind on your mortgage, here’s what you should know about foreclosures, how it can impact you and your property, and what you can do to prevent foreclosure.
Consequences Of Foreclosure
Foreclosure happens when you fail to make your mortgage payments and your lender seeks legal action to repossess your home. Your home will then be sold off either in an auction or in a sale, and the proceeds will go to the lender. When your property in LA undergoes foreclosure, the following consequences could happen to you:
- Eviction. You and your household will have to move out after the foreclosure process is complete. Staying in the property afterwards is illegal, and the lender or the new homeowner can formally evict you.
- Credit score drop. Having a foreclosure on your financial record can tank your credit score. This can prevent you from getting better deals from future loans, and lenders may even reject your application because of this. Low credit scores can also affect your ability to apply for insurance, phone plans, and credit cards.
- Loss of home and equity. You lose possession of the house, which will go to your lender, who will sell it off to recoup their losses.
Can I Stop A Foreclosure From Happening?
It might surprise you, but mortgage companies and lenders see foreclosure as a last resort. When you miss your mortgage payments and do nothing to address it, your lenders file a notice of default to protect their interest and minimize their losses in case you are unable to continue paying your mortgage payments.
However, if you can prove that you’re willing to work with your lender and repay your debt, this can stop them from seeking foreclosure and providing you with a modified repayment plan to consider your hardship.
When it comes to preventing foreclosure from happening, you have three options: work out a repayment plan that you can follow through, conduct a short sale, and sell your home.
The first can be done so you can keep your home and make payments easier. Here’s what you should know about short sales and selling your home to avoid foreclosure.
Short sales can be conducted when you are in pre-foreclosure, or after your lender has filed a notice of default but have not yet begun foreclosure proceedings. This means selling your property at a price less than the remaining mortgage payments. Before you can sell, you’ll need your lender’s approval to sell.
After the sale, your lender gets all the proceeds. They then have the option to either forgive the difference of the remaining mortgage payment, or if they get a deficiency judgement and require you to pay the remaining balance of your debt.
Conducting a short sale means selling your home, but unlike foreclosure this is not forced. It is the better option compared to foreclosure, as majority of the debt will be taken care of, there’s a chance of debt forgiveness, and your credit score does not go low enough that it affects your financial state for the next several years.
Sell To A Professional Home Buyer
From your first missed payment until your lender files a notice of default, you can still sell your home without having to conduct a short sale. However, time is of the essence, which means listing your property on the real estate market and waiting for an offer may be out of the question. For the fastest results, your best option is to sell your LA property to a professional home buyer before foreclosure.
Professional home buyers like Inhouse Offer understand that homeowners need to sell their property as fast as possible, which is why we buy houses in Los Angeles within a short timeframe. After contacting us, homeowners can expect a fair cash offer within 72 hours or less. In as little as 14 days, we can conduct the closing process and transfer the money to you within that time.
By selling your home for a fair price, you can gain the funds to pay off your remaining mortgage. And with reduced fees and no real estate agent fees, your household can benefit from the proceeds of the sale, prevent going into foreclosure, and protect your credit score.
When you’ve missed your mortgage payments and are at risk of foreclosure, it’s important to understand the potential impact it can have on your household and your finances. You have several options to prevent foreclosure: work with your lender to modify your mortgage payments, conduct a short sale, and selling your home fast.
Sell your home fast with Inhouse Offer. Contact us today and receive a fair cash offer within the next 72 hours.