“I’m behind in payments…will I be giving my house back to the bank in Detroit?”
It’s a shame when someone loses their home. Unfortunately there are times when financial circumstances just happen and turn against you. It is during these times that the financial commitments that you have just become simply too much to manage.
If the situation you’re in progresses too far, it’s possible that you could be forced into an unfortunate situation of giving your house back to the bank in Detroit MI, which would leave you temporarily with no place to stay. Additionally, there will likely be long-term consequences, which would include very dramatic and long-lasting impacts to your credit (which would negatively affect your ability to get a house in the future).
Of course, you don’t want that and I don’t want that for you. That is not the preferred outcome. Fortunate for you, there is a path you can start taking today to assist you in proactively protecting yourself and getting back on track to financial stability.
Here’s a brief overview of the foreclosure process
I’ll give you a quick overview of the foreclosure process so you understand what we’re talking about in this article. The foreclosure process can vary depending on which location you are in and the type of mortgage in place on the house.
Often, if you miss only a few payments on the mortgage, your loan company starts to send you notifications and then you’ll start to receive warnings. Over time, the more you neglect to pay these mortgage payments that you have missed, the loan company may decide to put your home up for auction to the public.
Depending on what state you live in dictates how long you can remain in your house after it is sold through this auction. At some point though, you will have to move out and find a new place to stay.
Fortunately, you have options!
If you decide to wait until your home is foreclosed upon, it will have a devastating effect on the credit you have likely built up over the years, ridding you of all that hard work. One of the options you have is to work out an arrangement with the mortgage company called a “deed in lieu of foreclosure”.
This process is you handing over ownership of the house to the company that holds your loan so they can save the money they would have spent on the foreclosure proceedings, which can be significant for them. And you get to avoid having a foreclosure listed on your credit rating.
Another, more preferred method, that allows you to avoid foreclosure, is by selling your house before it is lost though the auction. If you sell the house and the loan is paid in full then the penalties against you would have gone away and your credit rating remains in tact. (If your loan can’t be paid in full you will need to make up the difference).
To show what I’m referring to, here is an example: Let’s say you owed $100,000 on your home through the mortgage and you sold your home to a direct Michigan cash home buyer like us for $90,000. You would have to give that money to the loan company, along with $10,000 to make up the short-fall, and your loan would be paid off. (If you contact a real estate attorney, you may be able to negotiate a deed in lieu of foreclosure deal in which the loan company agrees not to go after the difference in exchange for the deed to the house.
At Amaze Properties LLC, we’re professional real estate investors. Contact us today at (586) 991-3363 to find out what we can offer you for your house — even if it needs repairs.
I want to avoid giving my house back to the bank in Detroit!
Why would someone choose to sell the house instead of letting it go through foreclosure? (After all, they aren’t living in the home anymore.)
Well, one side of it is that losing a home can be difficult, but more importantly if you sell your house instead of let it fall into foreclosure, the impact on your financial situation and your credit is considerably less than if you simply wait out the foreclosure process. It’s likely that going through foreclosure may impact your credit score by as much as 100 to 150 points. So in the short-term, selling your house is still a much better choice than the long-term pain of giving your house back to the bank.