Pre-foreclosure is what happens when you miss 3 to 6 consecutive mortgage payments and your lending institution starts issuing warnings. If you have received a “notice of default” due to missed mortgage payments, your bank has initiated the pre-foreclosure process. If you’re already in pre-foreclosure and you don’t know what to do, the important thing is to remain calm. You have options available as a homeowner.
What to Do When in Pre-Foreclosure
If your bank has begun pre-foreclosure proceedings, you need to take action right away. If the bank forecloses, you’ll be evicted from your home. Your credit score will also take a massive hit, potentially making it difficult for you to buy another home. These are just some of the options you might consider:
- Refinancing: If you have some equity in your home, you can speak with your lending institution about refinancing. In many cases, this simple step can resolve the matter all at once.
- Filing for Bankruptcy: If you’re having significant financial difficulties, filing for bankruptcy may help you to take control of your debt. While it won’t make your real estate troubles disappear, it will buy you some additional time to make the payments.
- Short Sell Your Home: You may be eligible for a short sale. In these cases, the bank will allow you to sell the home quickly for less than is owed. You can then move on with your life, and the bank takes the loss as a tax write-off.
How Much Time Do You Have to Make Payments During Pre-Foreclosure?
Your notice of default will usually tell you how much time you have to get current on your payments. Usually, you have 3 months from the time pre-foreclosure begins. If you don’t make the payments within that time, the home goes into foreclosure.
If you’re unable to make the payments and you don’t have the equity to refinance, a short sale is usually your best option. You can sell your home to a real estate investor and use the payment to finance your next home.
Why a Short Sale Is Preferable During Pre-Foreclosure
With a short sale, you’ll usually earn less than your home’s market value. But if you’re struggling financially, there are some specific advantages to selling your home during pre-foreclosure.
- A reputable real estate investor will purchase your home in a matter of days, not months. So you don’t have to worry about going into foreclosure while waiting for a buyer.
- Real estate investors pay cash for homes. So you’ll receive the money you need to get your finances back on track.
- By selling your home, you avoid damaging your credit score due to foreclosure.
- The whole process is quick and easy. You don’t have to pay for home inspections, you don’t have to make repairs, and you don’t even have to clean before moving out.
- There are no real estate fees or commissions involved.
If you’re facing foreclosure and you’d like to determine how much you could earn by selling now, we’d love to speak with you. We buy houses for cash in Los Angeles, and we can make you an all-cash offer and ensure that you get paid in as little as 7 to 10 days.
Want To Discuss Your Pre-Foreclosure Options? Call Us at (626) 817-3351