Orlando Real Estate

Foreclosure 101: What You Need to Know

 

Most people don’t know anything about the act of foreclosure, other than that it involves losing one’s home. However, foreclosure is a complex process, and isn’t inevitable even if you are struggling to pay your mortgage or are months behind on payments. Here’s a brief overview that covers what foreclosure is, how to avoid foreclosure, how to stop scammers, tips for purchasing a home after foreclosure, and how a real estate agent can help--

 

Foreclosure Defined

 

Foreclosure is the act of the bank or lender taking possession of a home when the party holding the mortgage fails to make payments. Foreclosure doesn’t happen immediately; the bank must first send a notice of default, which is issued after the fourth missed monthly payment.

 

How to Avoid Foreclosure

 

Foreclosure isn’t inevitable, even if you’re behind on payments. You should work with an experienced professional to explore your options, including:

 

?      Modifying or refinancing your loan;

?      Seeking assistance from state or federal programs if you are unemployed;

?      Considering filing for bankruptcy; and

?      Selling your home.

 

Foreclosure Scams and How to Spot Them

 

If you are at risk of foreclosure, be aware of foreclosure scams. In these schemes, scammers promise to save your home or lower your mortgage payments, but require a fee to do so. These scams can cost you thousands of dollars, and may not delay or prevent the foreclosure. If you have received a notice of default from your lender, watch out for the following, which may be signs of a scam:

 

?      Anyone promising to modify your loan, but asking for a fee;

?      Anyone contacting you claiming to be from the bank/lender, but asking for payments to be sent to a separate location/party;

?      “Money-back guarantee” claims;

?      Offers to buy your house for cash; and

?      Pressure to sign documents or papers you don’t understand and haven’t thoroughly read.

 

Can I Purchase a Home after a Foreclosure?

 

If your home was foreclosed on, you may be wondering whether or not purchasing again in the future is possible for you. Many people purchase a home after foreclosure, but must do the following first:

 

?     Save money - If you want to purchase after foreclosure, you will likely be required to put at least 10 percent down;

 

?     Rebuild credit - You will need to show a history of on-time payments and a low credit card balance in order to qualify for a loan after foreclosure; and

 

?     Wait - You will likely have to wait at least two years, and up to seven years, to qualify for a loan after foreclosure.

 

Reach Out to an Experienced Real Estate Agent to Learn More

 

To learn more about the foreclosure process and buying a home after foreclosure, contact an experienced Orlando real estate agent. A real estate professional can help you to find a home that’s within your budget, and answer any financing questions you have.

 

Posted by David W. Welch on April 20th, 2018 11:54 AM

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