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 Fort Myers anyway?
Many homeowners across America and Fort Myers are facing difficulties making their monthly mortgage payments.
When a homeowner misses 3-6 months of mortgage payments, the lending institution will issue a warning, notifying the homeowner to pay or lose their home. This period is known as “pre-foreclosure.”
Banks and mortgage lenders typically provide three months for the homeowner to become current. Of course this number can vary by bank and situation sometimes.
While failure to make mortgage payments can lead to foreclosure, where the bank seizes and sells the property to recoup their losses, there are fortunately options for homeowners in this difficult situation. This pre-foreclosure period is crucial, as it offers a window of opportunity to save your home. By contacting your lender and exploring the available solutions, you can potentially prevent eviction and foreclosure altogether.
Pre-foreclosure Options for Borrowers
If you’re behind on mortgage payments, you’re likely to 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 your mortgage is “above water,”
Since you own a part of your house through mortgage payments, that ownership is called equity. The good news is that having equity can open the door to refinancing your mortgage. Refinancing means replacing your current loan with a new one, ideally with more favorable terms. In many cases, this can translate to lower monthly payments.
Lower monthly payments can free up a significant amount of money in your budget each month. This extra breathing room can be used for various purposes, such as saving for retirement, investing in your children’s education, or making home improvements. It’s important to shop around and compare rates from different lenders to find the best deal. We recommend contacting a local mortgage broker in Fort Myers who can guide you through the process and help you secure the best possible refinance option for your situation.
- You may be able to quickly sell your home to a real estate investor that’s reputable in Fort Myers like us at Core Real Estate Properties, using the cash acquired to pay the months of back-payments owed (or we *may* be able to work out something with the lender that relieves all or part of your back payments.We can buy your Fort Myers Florida area home quickly, often in just a week or two, will pay in cash, and takes the stress out of trying to find a buyer.
- You can contact the bank and ask them to permit a short sale.
A short sale can be a way out for homeowners who are underwater on their mortgages, meaning they owe more on the loan than their home is currently worth. In this situation, selling the house through traditional means becomes difficult because potential buyers won’t offer more than the home’s market value. A short sale allows the homeowner to sell the property for less than what’s owed on the mortgage, with the lender agreeing to forgive the remaining debt.
This process isn’t always straightforward. The lender needs to approve the short sale, and they will only do so if they believe it’s the best way to recoup their losses. The homeowner will also need to find a buyer willing to purchase the property at a price lower than the outstanding mortgage balance. Additionally, depending on your state’s laws and the lender’s policies, you may still be responsible for the difference between the sale price and the loan amount. This is called a deficiency judgment. For these reasons, it’s important to consult with a financial advisor and a real estate agent experienced in short sales to navigate the process effectively.
- You may be able to declare bankruptcy, which can buy you time to pay your debt. Bankruptcy will remain on your credit report for years, and can cause significant damage.
Lenders are very much aware of the widespread financial troubles across the country and they’re willing to work with borrowers a lot of the time.
If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least salvage your credit rating.
A foreclosure can often negatively affect your credit score by 200-400 points and can prevent you from obtaining a loan of any sort for 5-7 years, so be very dutiful if you’ve received a Notice of Default from your lender.
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 Fort Myers area house – We buy houses in Fort Myers 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.