Local homeowners may find themselves in foreclosure if they are facing financial difficulties.
Foreclosure occurs when the bank begins to take ownership of a property to recover the loss of too many missed mortgage loan payments.
If you are going into foreclosure, you may be curious about what you can do about it.
In this post, we’ll go into several foreclosure prevention measures in Texas that you can take to keep your home away from foreclosure.
Foreclosure prevention measures in Texas
Not every measure will work in your situation, but we’re making you aware of them so you can decide for yourself:
1. Pay off your mortgage / sell your property. The most simple way to stop foreclosure is to pay off your mortgage. This is originally what the bank wanted, so they would happily allow you stay in your home if they get their money back. However, this is not always possible, which may be the reason you’re dealing with foreclosure in the first place.
2. Work out a deal with your bank. Sometimes you can speak to a mortgage or foreclosure specialist about changing the structure of your mortgage and work out a deal with your bank. A deal could include having payments spread out so they are lower each month. Ensure that the deal works for you because you don’t want to end up going through the process again.
3. Do a short sale. A short sale is when you sell the property and use the proceeds of the sale to pay down or pay off your outstanding amount with the bank. This keeps a foreclosure from impacting your credit score and it gets the bank off your back!
4. Give your deed in lieu. Another option would be a deed-in-lieu-of-foreclosure, which basically means that you will hand over the deed to your house to the bank and they agree not to put you through foreclosure. This will often only work if your house is worth approximately the amount owing on the mortgage. If not, the bank may pursue the difference.
5. File for bankruptcy. In some ways, a bankruptcy is far more dramatic than a foreclosure because it impacts your whole life. However, once you file for bankruptcy, the foreclosure process has to stop so it’s still a foreclosure prevention measure.
If you’re not sure which one to do, consider this: If you can afford payments and you want to stay in the house then a foreclosure workout arrangement (#2) is probably your best option.
If you want to put everything behind you and move on with your life then consider selling your home and paying off your mortgage with that money.
Considering selling your Texas house?
We buy houses in Texas for cash and would love to see if we can help you during your short sale. Contact us by filling out the form on this page and we’ll see if we can work with you.
Check out these blog entries we have posted on Avoiding Foreclosure: