“I’m behind in payments…will I be giving my house back to the bank in Florida?”
Losing your home is a nightmare scenario that nobody wants to experience. Unfortunately, unforeseen financial challenges can sometimes lead to circumstances where those financial commitments become unmanageable. If your situation spirals out of control, you may find yourself in the unfortunate and painful situation of having to surrender your beloved home back to the bank in Florida, leaving you without a place to stay. The consequences of such a situation can be long-lasting, including a significant and lasting impact on your credit score that may hinder your ability to secure housing in the future. Needless to say, this is not an ideal outcome for anyone.
The good news is that there is a strategy that you can take to protect yourself proactively and work towards restoring your financial solvency. Rather than accepting this devastating outcome, you can take action today to help yourself get back on track towards stability. By doing so, you can prevent the worst-case scenario from happening and secure a better outcome for your future. Remember, even if the situation feels out of control, there is always hope, and by taking the right steps, you can regain your financial footing and move forward with confidence.
Here’s a brief overview of the foreclosure process
The foreclosure process can be complex and varies depending on where you live and the type of mortgage you have. In most cases, if you miss a few mortgage payments, your loan company will begin sending you notifications and warnings. If you fail to repay the missed mortgage payments over time, the loan company may initiate the process of selling your home in a public auction.
The length of time you can remain in your home after it is sold in auction varies from state to state. However, at some point, you will need to find a new place to reside. This can be a daunting and stressful experience, particularly if you have been in your home for an extended period. However, it is essential to stay proactive and explore all possible options to avoid this situation.
If you find yourself in this situation, there is hope. You can take steps to prevent foreclosure, such as negotiating with your lender, refinancing your mortgage, or exploring government-backed assistance programs. It is critical to take action as soon as possible and seek professional help from a financial counselor or a real estate expert. By doing so, you can work towards securing a positive outcome and avoid the devastating consequences of losing your home. Remember, you are not alone, and there are resources available to help you get back on track towards financial stability.
Fortunately, you have options!
If you wait until your home is foreclosed, it can have a devastating effect on your credit rating. One option to protect yourself is to work out an arrangement with the loan company called a “deed in lieu of foreclosure”.
This is when you hand over ownership of the house to the loan company so that they save the money they would spend on foreclosure proceedings, which can be significant. And you get to avoid having a foreclosure listed on your credit rating.
You can also avoid foreclosure by selling your house before it’s lost at the auction. If your loan is paid in full then there will be no more penalties against you and your credit rating. (If your loan isn’t paid in full you will need to make up the shortfall).
Here’s an example: Let’s say you owed $100,000 on your home and you sold your home to us for $90,000. 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 off. (If you contact a real estate attorney, you may be able to negotiate a deed in lieu of foreclosure deal in which the loan company agrees not to go after the difference in exchange for the deed to the house.
I want to avoid giving my house back to the bank in Florida!
Why do people choose to sell their home instead of going through foreclosure? (After all, they still don’t live in their home anymore.)
Losing a home is a tough situation that no one wants to be in. However, it’s important to understand that the impact on your financial situation and credit score is considerably less if you take proactive steps, such as selling the property, rather than waiting for the foreclosure process to play out. Foreclosure can have a devastating effect on your credit score, potentially lowering it by as much as 100 to 150 points. This can make it difficult to obtain credit in the future, and may even impact your ability to rent a home or get a job.
On the other hand, selling your home before it goes into foreclosure can help you avoid these negative consequences. Although it can be a difficult and emotional decision to make, it can ultimately be the best choice for your financial future. By selling your home, you may be able to recoup some of your equity and pay off any outstanding debts. You may also be able to negotiate a short sale with your lender, which can help you avoid a foreclosure and its associated costs.