How to Prevent Foreclosure

How to Prevent ForeclosureAs long as your home hasn’t been sold, you can still prevent a foreclosure. But how you prevent the foreclosure really depends on why you foreclosed. Often a foreclosure is the culmination of a multitude of events, and stopping it requires that you get to the root of the problem. Here’s what you need to know.

If You’re Temporarily Behind on Your Mortgage

Let’s say that you’ve temporarily fallen behind on your mortgage. You have a few options.

  • You can ask your bank to re-age your loan. They’ll take the months you missed and add them to the end of the loan. So, if you missed a year of payments, you’ll be paying your mortgage for a year longer than you initially were — but you don’t need to pay it back now.
  • You can ask your bank to refinance your loan. You could even refinance a loan with only seven years remaining to a 30-year loan if you really wanted to. To do refinance, you’ll need to show your bank that you can pay for the refinanced loan, and your credit can’t be too bad (a tough sell when you’re heading into foreclosure).
  • You can get your loan paid up quickly. It may be that you just need to pay your loan off as fast as you can. If you can pay your loan off quickly enough, you’ll be fine.

But most importantly you do need to talk to your bank. Your bank will be able to give you options. They don’t want to foreclose because it’s expensive and time consuming for them. They’ll only foreclose if they start suspecting that they aren’t going to get their money back.

If You Can’t Afford Your Home

Realistically, you could be more than “temporarily” behind on your mortgage. If you can’t afford your home anymore and you aren’t going to be able to afford it in the near future, it’s better to sell your property.

First, you can ask your bank for a short sale. A short sale lets you sell the home for less than you owe on it. If you owe $250,000, you can sell your home for $200,000. The extra $50,000 is written off, though you need to pay taxes as though you gained that money (because technically it was a gift from the bank). 

If you can sell your property before the bank forecloses, it’s much better. You won’t have a foreclosure on your record, and if you have enough equity and don’t need to do a short sale, you can walk away with more money in your pocket. A foreclosure isn’t just distressing; it’s also expensive.

If You Can’t Afford or Sell Your Home

OK, there’s also another type of foreclosure. It happens when you inherit a home that needs major repairs or when you find that your own home has fallen into disrepair. There can come a time when you can’t afford a property, you don’t want it, but you’re also having difficulty selling it.

It’s hard to sell a home that needs renovations. Most banks won’t lend money to purchase a home that needs major repairs.

But there’s still an answer. Cash buyers. Cash buyers can buy your home without an appraisal or an inspection. A cash buying company isn’t going to want to see any renovations or repairs; they can do those themselves. This frees you from having to maintain a home that’s falling apart and that you really don’t want. 

Ultimately, many properties foreclose simply because it isn’t a good idea to keep them. They’re too expensive, they’re too difficult to maintain, or they’re otherwise too much to handle. At We Buy Killeen Houses, we can get you out of a home that you no longer want. Contact us today to get a quote.

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