If you are faced with being in a foreclosure sale, you need to understand the best way to protect you and your family moving forward. When unpredicted and unprepared financial difficulties arise, this is not the time to bury your head under sand. Read the article below to find out what you can do.
While a foreclosure is never a good thing, it isn’t the end of your financial world. Here is what sellers need to know about foreclosure effects in Charlotte to properly plan for future real estate ownership.
When is it too late to stop foreclosure
According to Fabricius Law Bankruptcy “A lender’s representatives commence a foreclosure under a deed of trust by filing with the clerk of court a notice of hearing. For a primary residence, NC law (NCGS 45‑102) requires a 45 day notice to be given to the borrower before filing the notice of hearing. This document, which would itemize amounts due and note some foreclosure alternatives, is an important indicator that the lender is serious about moving into foreclosure.”
What Sellers Need To Know About Foreclosure Effects In Charlotte
Ability to Collect Sale Proceeds
When the bank forecloses on a property, most homeowners are often far removed from the process. Most don’t even know when the house is scheduled to be sold or how far along the process is. Many people feel emotionally drained from whatever the reason that first started the financial difficulty and now with the real possibility of loosing their home may be to much to bare. The bank has taken over on the property because the owner hasn’t made payments. This can make the homeowner just give up and stop fighting. But, just because the financial difficulty has caused you to loose your home in a forclosure does not mean that the process has to completely destroy your future possibility of owning another home. What many homeowners don’t always understand is that there is still an opportunity to get some cash out of the home
Banks are not in the business of making money on properties through buying and selling like a real estate investor. The bank seeks to regain its investment of the mortgage amount. If a foreclosed property provides surplus above any lien balances, the excess goes to the former owner in most states.
My house is being auctioned what can i do?
This is an important thing to remember to maintain the property as much as possible. So instead of following the example of others who completely destroy the house because they feel angry with the bank for taking it. Most foreclosures are purchased in complete disrepair because former owners take frustration and anger out on the property being seized. Keeping the property in pristine condition can yield higher sales and thus money back to the former owner as small consolation. Another very important aspect to consider is, if you vandalise the house before you leave it is an illegal act that can be punishable by law. Also, after the new home owners can put in an insurance claim on the home and then the insurance company will go after the previous owner for the damaged goods. Insurance companies are relentless for collecting money they can go as far as garnish wages, collections and seize bank accounts.
Credit Effects Over Time
Foreclosure hits your credit significantly. In addition to the late or non-payments of the mortgage, the seizing of the property can drop credit scores two hundred or more FICO points. Instead of loosing your house to foreclosure and damaging your credit even furthur you could sell it for cash with a real estate investor. Cash buyers can come up with the cash very quickly since they don’t have to wait to get financing. A reputable and local real estate cash buyer in Charlotte is Charlotte Sell your House.
The foreclosure itself remains on credit scores for seven years, the same as a bankruptcy. Another option to slow down the foreclosure is to claim bankruptcy. This may give you time to find other options on selling your house, especially since they both stay on your record the same amount of time. Rebuilding credit can happen immediately with good payment history on credit card and auto loans. Most mortgage lenders will not consider a loan to someone with a foreclosure for at least three years from the date of the foreclosure settlement (selling date). What ever the reason was that caused you to financially spiral out of control and loose your house needs to be resolved, before attempting to take on the responsibility of trying to purchase another house too soon. Not owning a house but renting has been on the rise, since it allows you to be free from responsibility of maintaining the house and free to relocate for any reason.
Depending on the circumstances behind the foreclosure, some lenders will consider another mortgage sooner, but not before two years of the settlement date. Considered hardships included a loss of job or severe family illness or death. These need to be well documented and the circumstances leading to the foreclosure must be rectified prior to getting approval for a new loan.
Potential to Getting Home Back
There is one way some homeowners are able to reclaim their home even after the foreclosure sale has occurred. This is called a redemption and is available for homes seized through a judicial foreclosure.
If the home is eligible for redemption, the former owner has one year to complete the redemption. The redemption requires paying the new owner for the total balance of the previous mortgage and remunerate the new owner for any repairs and upkeep.
While a foreclosure is a tough process to experience, it isn’t the end of the world and it is possible to buy another home. In most cases, with smart credit repair, buying another home can happen much sooner than many foreclosure participants expect.