Are you experiencing financial hardship and are behind on mortgage payments? During 2020 many homeowners have experienced financial problems and some of them have chosen to temporarily stop paying their mortgage. Perhaps, they are scared about the economic uncertainty or lost their job due to the COVID-19 outbreak.
If you feel identified with these situations and a foreclosure process seems to come soon, you should learn how to handle it correctly. Yes, it’s stressful and terrifying to think about losing your home, but it’s a reality you have to deal with. The good news is that there are many alternatives you could try and potentially avoid foreclosure in Colorado Springs entirely.
What’s Foreclosure?
Foreclosure is a legal process where your lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property. This happens when you don’t make your mortgage payments or violate any of the agreement’s terms. Sometimes, you can avoid it, but you must do something as soon as you’re informed.
How To Avoid Foreclosure
Even if you have missed a payment or two, there are some alternatives you can try. Let’s explore these options and choose the one that fits your needs and preferences.
Reinstatement
A reinstatement occurs when the borrower brings the delinquent loan current in one payment. During this period, you can pay back what you owe – including missed payments, interest, and any penalties – before a specific date to get back on track with the mortgage. Reinstating a loan stops a foreclosure because the borrower is allowed to catch up on payments and once the loan is reinstated, the borrower resumes making regular payments on the debt.
It’s a good idea to reinstate as soon as possible, as it’s risky to wait until the last minute. Keep in mind that If your funds aren’t delivered on time, the foreclosure sale will proceed. This means that a delay in the courier service or a bank processing error could result in losing your home. So, good advice is to present the funds in person or send the check via an overnight courier
Short Refinance
Short refinance refers to a transaction in which your bank or mortgage lender agrees to pay off your existing mortgage and replace it with a new loan with a reduced balance. In this case, the new loan amount is less than the outstanding balance, and the lender may forgive the difference to help the borrower avoid foreclosure.
Although the payment on the new loan will be lower, a lender sometimes chooses a short refinance because it’s more cost-effective than foreclosure processes. The bank ideally loses less than they would via foreclosure and the homeowner gets to stick around in their property.
Special Forbearance
Forbearance is a financial agreement between you and your mortgage lender to temporarily reduce or completely suspend your monthly mortgage payments for a period. Usually, it’s requested when you’re experiencing an issue that impacts your ability to pay, e.g, job loss, or major illness.
Forbearance is not a waive or grant, and once the agreement is over, you have to pay those missed payments. Also, even if the payment is suspended, the loan automatically accrues interest and you’ll receive monthly statements. Typically, this agreement lasts 90 days and may be granted up to 180 days.
Get in Touch With a Home Buying Company
Commonly, homeowners don’t take action immediately and sometimes they have less than 37 days – loan modification deadline – to avoid foreclosure in Colorado Springs. Besides, several alternatives have more disadvantages than advantages, and a decision has to be made. Home buying companies are an easy way to bypass foreclosure; they buy your house as-is and give your cash in hand in seven days.
The process is very straightforward and it takes three steps to sell your house with them. First, research about home buyers near you and contact them through their website by filling out an online form about the property. If your house meets their requirements, they will call you to schedule a house tour. After 24 hours, they’ll let you know their final offer and if you accept, they can close the deal in less than a week at a reputable title company.
Avoid Foreclosure in Colorado Springs
If you can’t see a solution to your financial situation, Colorado Cash for Keys can provide you with a fast and efficient alternative. We buy houses as-is and always offer fair, all-cash offers to exceed our customer’s expectations. Contact us today and avoid foreclosure in Colorado Springs.