With millions of homes across the country going into foreclosure, it’s important for both buyers and mortgage holders to understand the process.
So what is a pre-foreclosure in Southwest Michigan anyway?
Numerous homeowners in Southwest Michigan and throughout America are experiencing challenges when it comes to making their monthly mortgage payments.
If a homeowner misses 3-6 months of mortgage payments, the lending institution will typically issue a warning, informing the homeowner that they must pay or face losing their home. This phase is often referred to as “pre-foreclosure.”
Generally, banks and mortgage lenders offer a three-month period for the homeowner to catch up on their missed payments and become current. However, this timeframe may vary depending on the specific bank or situation.
If a homeowner is unable to make the required payments, the bank may proceed with foreclosure proceedings, taking ownership of the home and evicting the homeowner. Fortunately, during this stage of the foreclosure process, the mortgage holder may have various options available to prevent losing their home.
Pre-foreclosure Options for Borrowers
If you have fallen behind on your mortgage payments, it is likely that you will receive a “notice of default” from your mortgage lender.
This document will state that you have not made mortgage payments for the last 90-180 days. It’s important not to panic.
You have options that can delay or even prevent losing your home:
- If you have equity in your house, meaning your mortgage is “above water,” you may have the option to refinance your mortgage and receive lower monthly payments. Contact a reputable mortgage broker in Southwest Michigan, or reach out to us and we can connect you with one.
- If you’re struggling to make mortgage payments and need to sell your home quickly in Southwest Michigan, I Buy SW MI can help. We are reputable real estate investors who can buy your home for cash, allowing you to use the funds to pay off your back payments. In some cases, we may even be able to work with your lender to find a solution that relieves some or all of your outstanding debt. With I Buy SW MI, you can sell your MI home in just a week or two, without the stress of finding a buyer on the open market.
- One option available to homeowners is to contact their bank and request permission for a short sale. This involves selling the property for less than its current value, with the bank taking the loss as a tax write-off. However, it’s important to note that in some short sales, the homeowner may still be responsible for paying the difference if the sale price does not cover the amount owed on the mortgage.
- Declaring bankruptcy is one option to consider, as it can provide some time to pay off your debts. However, it is important to note that bankruptcy can have long-term consequences, including damage to your credit report for several years. It is advisable to consult with a financial professional or legal expert before pursuing this option.
Lenders are often willing to work with borrowers due to the widespread financial troubles across the country.
If you are transparent and maintain an open line of communication with your lender, you may discover that there are alternatives that can help you keep your home or at the very least, minimize the damage to your credit score. Lenders understand the difficulties many borrowers face and are often willing to cooperate.
If you receive a Notice of Default from your lender, it’s important to be diligent as a foreclosure can significantly lower your credit score by 200-400 points and may restrict you from obtaining any kind of loan for up to 5-7 years.
But if you’re not able to find a solution with your lender working directly with them… connect with us. We may be able to help.
Ways We Can Help If You’re In Pre-Foreclosure
- We can potentially help with a short sale – Submit your info on this website so we can evaluate your situation to see if we can help.
- We can buy your Southwest Michigan area house – We buy houses in Southwest Michigan and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>
- You can ask us questions and we can provide you FREE guidance and resources so you can make a well educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch.
If you’re in the pre-foreclosure stage… you’ve still got time to fix this situation.
Just connect with your bank to see if they’re willing to work with you… or contact us if you’d like to see what we can buy your house for or to tap into our free foreclosure foreclosure resources.