“I’m behind in payments…will I be giving my house back to the bank in Santa Clarita?”
Financial hardships happen to the best of us and nobody wants to lose their home to the bank with nothing to show from it.
If your situation progresses too far, you may be forced into the unfortunate situation of having to give your house back to the bank in Santa Clarita CA, leaving you temporarily without a place to stay. In addition, there may be long-term consequences, including a dramatic and long-lasting impact to your credit (and your ability to get a house in the future).
If your situation progresses far enough, you will be pushed into the unfortunate situation where the bank will take you home in Santa Clarita CA. This isn’t what anyone wants. When the bank takes your home, you will be left homeless for a period of time unless you have already made plans and the affect on your credit can be a lasting burden. Having this on your credit can make it impossible for you to buy another home and can make it very difficult to even rent. Many landlords do credit checks to see if you are good at making payments before they will rent to you.
Fortunately, there is a strategy you can take today to help you proactively protect yourself and get back on track to financial solvency.
Here’s a brief overview of the foreclosure process
The foreclosure process can vary depending on location and the type of mortgage you have.
In short, when you miss a few payments on your mortgage, your lender will start sending you warnings and updates to try to help you get back on track and to keep you notified of everything. If you continue to miss payments and fail to bring the loan current the lender and/or bank can put your home up for public auction in order to recover the money that they lent to you.
Depending on the state laws where you live, you may be able to stay in your home for a short period after the home is sold at auction but contact your local municipalities to find out the rules for your area. However, at some point you will have to move to a new place.
Fortunately, you have options!
When you start falling behind, you want to make sure to take action immediately and start preparing for what is to come. Even if you believe you’ll be able to catch up on the mortgage, you want to have other options in place in case that doesn’t work out. Too many people wait until days before the auction and then they reach out for help. In many cases it is too late then to do anything. So take action now!
If you don’t take action and wait until your home is foreclosed, it can have a very dramatic effect on your credit rating, which can make moving a very difficult task.
One of the options you have to avoid a foreclosure is to work out some type of arrangement with your lender. One of these arrangements is called a “deed in lieu of foreclosure”.
A “deed in lieu of foreclosure” is when you give the property back to the lender prior to the foreclosure so that the lender saves money that they would have spent on the foreclosure process which sometimes is in the tens of thousands. While this seems like you’re helping the bank, the bank in return helps you by not putting a foreclosure on your record. A deed in lieu of foreclosure still has an affect on your credit but not as as dramatic of an affect as a foreclosure.
Another option you have to avoid foreclosure is to sell the house prior to the auction. If you sell the home and are able to pay the bank in full then there will be no more penalties to you or your credit rating. If your loan isn’t paid in full, you’ll have to come up with the difference to make up the shortfall.
Here’s an example: Let’s say you still owe $200,000 on your mortgage and you decided to sell your home to us for $190,000. You would give that money to the loan company, along with $10,000 to make up the short-fall, and your loan would be paid in full. (If you reach out to a real estate attorney, they may be able to arrange that in return of the deed, you don’t have to pay the difference owed because this still saves them the money that would’ve been necessary in foreclosure)
At SK Home Buyers, we’re professional real estate buyers. Contact us today at (661) 535-0778 to find out what we can offer you for your house — even if it needs repairs.
I want to avoid giving my house back to the bank in Santa Clarita!
Why do people choose to sell their home instead of going through foreclosure? (After all, they still don’t live in their home anymore.)
Although losing a home can be difficult, going through the foreclosure process and dealing with the negative impact it takes on your financial situation and your credit can bring even more problems in the future. These problems include not being able to find a place to live, not being able to get a car, not being able to get student loans for your children to go to college and many more. A foreclosure can drop your credit score by 100 to 150 points. So the short term challenge of selling your home is still a better choice than the lasting affects of letting the bank take your home.