What is Pre Foreclosure?
Almost every year, there are tons of people worldwide who are facing foreclosure. Some lenders are not diligent enough to check the ability of the person to make repayments whiles others just don’t care. Of course, there are circumstances wherein there’s a sudden turn of events towards a person’s life which leads to their inability to pay for their mortgage.
It doesn’t matter what is the reason for why the client starts to lag on payments because from that point, it’s set. Initially, the lender is going to file for public default notice. This is going to kick off the process of foreclosure and at the same time, this is the point when it officially starts the pre-foreclosure. So if we look at it closer, pre-foreclosure is more like giving the homeowner a grace period to settle things.
The homeowner is warned that they are in default and have to take actions to solve it. But at this point, the lender can’t claim the property back and sell it to recover their costs. Depending by the state laws, the length of grace period is going to vary. There are some state laws that have grace period which last for 6 months but some states have shorter periods than this. As soon as the property entered pre-foreclosure, there are several ways that the homeowner can steer clear of facing a foreclosed property and have it sold by the lender. In the next lines, you are going to discover two of the most popular options you can take. If you want to learn more about it, I suggest you to keep on reading.
Number 1. Pay off the default – however, the property will be removed from pre-foreclosure in the event that the homeowner wasn’t able to settle the default amount. In the event that the default amount is small and that the default was caused by temporary glitch, then it might be worthwhile to take out personal loan to repay the debt. If the problem is ongoing, this may just open up more issues for the homeowner.
Number 2. Sell the house – if all else fails and you can’t really make paying the default amount, then selling your house is the next logical move to make. By selling the house, you as a homeowner can get reasonable price for it. Waiting for the lender to sell the house on the other hand is not a good idea as the sale price will be lower. This is because the lender will offload the property as quick as they can.
While there are options for you to avoid foreclosure, still it will be recommended that you make your best efforts to not get to this point.
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