What you can do to prevent foreclosure in Colorado Springs, Co
If you have fallen on hard times financially, and have been struggling to make your mortgage payments, you may find yourself facing foreclosure. Do you know what to do next? Do you have all the information you need to make that decision?
Foreclosure is a term used to describe when a homeowner is no longer current on mortgage payments, and the mortgage lender is pursuing legal action to collect on the amount still owed on the property.
If you are in pre-foreclosure or have been served with a foreclosure notice, you still have options. Following one or more of these options could get you out of foreclosure entirely, or at least protect your credit.
Foreclosure Prevention Measures in Colorado Springs, CO
Having information about your options is power, allowing you to make an informed decision about your own situation. Don’t wait until it’s too late, or the bank can repossess your home and you will have a very damaging remark on your credit.
- Sell your home and pay off your mortgage. This is the least painful method of stopping a foreclosure. The bank’s priority is to collect the amount still owed on your mortgage loan. If you are able, you can negotiate a quick sale on your home for the amount you still owe to the bank. This lets you out from under a home you can’t afford and avoids damaging your credit rating entirely.
- Work out a repayment schedule with your lender. If you’re unable to sell your home and pay the remaining balance in full, you can negotiate with your lender for terms that work with your current financial situation. Some lenders are willing to lower payments or negotiate more flexible terms temporarily to allow homeowners to ‘catch up’ on back payments. This is a good option if you can make regular modified loan payments until your financial situation improves.
- Surrender deed in lieu of foreclosure. In this scenario, an owner agrees to turn over the deed to the home to stop a foreclosure from advancing. This option is not preferred by most lenders, as the lender is responsible for listing the home for sale for the amount needed to pay the remaining balance on the loan. If your home is underwater, meaning you owe more on your mortgage than your home is worth, then this is not a good option for you.
- Negotiate a short sale. Short sales are preferred by most lenders instead of a deed in lieu of foreclosure. The homeowner is responsible for listing a property for sale, and the lender collects the purchase price in order to pay off the remaining balance owed. This is a popular option because it prevents a foreclosure from harming your credit.
- File for bankruptcy. Lastly, you can file for bankruptcy. This is a last-resort for most situations, as it has the most impact on the homeowner’s situation. Filing for bankruptcy will stop a foreclosure from happening, and allow you to move on from a bad situation—but at a price. Bankruptcy has a negative impact on your credit rating and can make it difficult to purchase a home in the future.
Common Financial Situations
We have been able to help our clients with all kinds of situations like the ones listed above. If you’re not sure what the right choice is, consider these scenarios and see which matches your situation the best.
You want to stay in your home, and you think you will be able to make the payments you need with a little assistance.
– Go with Option 2. Contact your lender to negotiate a repayment schedule that will work for you and your lender.
You’re not interested in trying to keep your home, but you want to avoid foreclosure and limit the damage to your credit score.
– Options 1, 3, and 4 will help you get out from under the property while avoiding foreclosure. Talk to one of our foreclosure experts at 719-357-7497 to explore which of these options would work best for you.
You can’t afford to make payments and/or you owe more on your home than the property is worth.
– Option 5 may be the best option for you, but please make sure to speak to your lender to explore other options before considering filing for bankruptcy.
We hope this information is beneficial to you. Please feel free to contact our experts at 719-357-7497 or email@example.com for a free consultation. We help Colorado Springs, Denver, and Pueblo homeowners find the best solution to any situation—whether you end up selling us your house or not!