We all have tough times at times. As a real estate owner, a challenging time can mean the loss of the biggest investment of your life: your Syracuse house. If you are unable to pay your mortgage and insurance, you’ll face foreclosure with your lender if you miss a certain amount of payments; it all depends on your mortgage document.
Foreclosures Happen To The Best Of Us
In most cases, the foreclosure process will not begin until you have missed between 3-6 payments. For starters, it is important to understand that foreclosures are a process. The first step is called pre-foreclosure. This means that the property is in default and the bank may or may not auction the property. The second step is a short sale. Here the owner attempts to sell the property before the bank forecloses, but the market value is a little lower than the remaining amount that falls due on the loan. Depending on the bank, they may or may not accept offers that are below the balance due at that time. If the owner can get the bank to secure short-selling, it is much better for their credit. The third step is the foreclosure auction. In this case, the bank is seeking to get the most money for the property in a short time. The fourth step is an REO, which stands for “Real Estate Owned”. If the property is not sold at auction, the bank will take possession of the property and put it on the market for sale.
Based on the procedure outlined above, “foreclosure” is the bank that takes over ownership or ownership of your home in the market. This would affect your credit rating and also appear in reports on prospective landlords. The foreclosure stays on your balance for at least 7 years before you drop off, sometimes 10 years. Depending on the situation, you will have more time to live in your house if you have it foreclosed on due to the statutory repayment period. This time frame depends on whether you have taken out the title via mortgage or escrow. If you have a mortgage, the process can take as long as 30 days or as long as 2 years. If you have not repaid your loan by the end of the repayment period and are still unable to meet your payments, then you really need to move out. If you have acquired the title through a deed of trust, there is usually no legal repayment period and you must move out immediately.
Is A Short Sale Really The Answer?
During the foreclosure process described above, you have the option of listing your Syracuse home as a short sale. The best time for a short sale is when you realize that you are not in a position to meet your payments under your credit agreement and before the lender takes legal action against you and officially owns your home. You can list your home on the market and try to get an offer that satisfies or really comes close to the balance of your loan. This could possibly be a challenging process as you will need to be in constant communication with the lender about the offers you are receiving and wait for them to approve or reject the offers you are receiving. If you have an offer that the bank is willing to accept, selling your house Syracuse to that buyer would save you some of the loan loss from foreclosure, though it would still negatively affect your credit.
The best option would be to avoid foreclosure altogether and negotiate a sale on your property before you get to the point where the payments for your loan are missing.
Contact High Peaks Capital today at (315) 558-8332 to see what options we could offer you so you don’t have to decide what would be better, a foreclosure or short sale of your Syracuse home.