Foreclosure is an impending threat for millions of Americans. Many homeowners are worried that they will face foreclosure in the next few months or years. If you’re wondering how to stop foreclosure in Florida, you need to know about the potential solutions.
Depending on your relationship with your lender, your credit score, and other factors, it’s possible to stop foreclosure and retain ownership of your property. Let’s take a closer look.
With a forbearance, your lender agrees to stall or halt mortgage payments for a set amount of time. At the end of this timeframe, however, you have to pay back whatever you owe, which could be a high amount depending on how long the forbearance goes on.
Still, this can be a good way to stop foreclosure in Florida if you know you'll only experience temporary financial trouble. For instance, if you are out of work for a month, but you know you'll be back on your feet in two months, a forbearance could be just the ticket.
If you know your financial difficulties are unlikely to resolve soon, consider offering your lender a deed in lieu of foreclosure. With a deed in lieu of foreclosure, you give your lender possession of your property with no strings attached.
Your lender loses out on any money you owe them, but they can immediately try to turn a profit by selling the property. For you, a deed in lieu of foreclosure is beneficial as it doesn't drastically affect your credit score (although it will still lower it), and you don't have any mortgage payments or debt from the property.
Keep in mind that not every lender will accept a deed in lieu of foreclosure. You generally have to have a good relationship with your lender and a high credit score to qualify.
You can also apply for a loan modification. Many lenders will agree to modify your loan by changing the interest rate or by refinancing your loan entirely. A loan modification could be an ideal way to stop foreclosure in Florida by lowering your monthly payments and making your mortgage easier to deal with.
A modification could be the perfect solution if your initial mortgage agreement isn't working for you. For instance, maybe the interest rates are unexpectedly high, or maybe you had to take a lower-paying position. Whatever the case, remember that your lender wants to work with you and might be willing to accept a loan modification if foreclosure is the only other alternative.
If those suggestions don’t work, consider a short sale. During a short sale, you sell your real estate quickly for less than what you owe on it. The proceeds go straight to your lender, who may agree to forgive the remaining balance.
Say your mortgage is $400,000, and you perform a short sale and get $300,000. If your lender agrees, they take the $300,000 and forgive the remaining $100,000. Then, you can move on and pursue a different housing solution. Keep in mind that a lender may still require you to pay the rest of the balance owed, so it is important to iron out the details before pursuing these options.
However, you have to get lender approval before pursuing a short sale. Generally, lenders will only approve if you have a good credit score and if the difference between what you owe and what you’ll likely receive from the short sale is minimal.
If none of the above solutions fit your needs, consider co-ownership with Balance. Balance helps homeowners stay in their homes and pay down debt by taking out an equity investment in their properties. In other words, if you’re approved to work with Balance, we will pay off your mortgage in exchange for an ownership interest.
Your expensive monthly payments are replaced with a single monthly payment to us, allowing you the flexibility to pay off debt or save money depending on your goals. We may even pay you a lump sum for the equity we purchase, depending on how much you’ve already built up in your property.
Want to become the sole owner of your home later on? Co-owning your property with Balance right now doesn’t keep you from refinancing or selling when you’re ready. Working with Balance may be an effective way to stop foreclosure in Florida, as many homeowners have already discovered.
Ultimately, stopping foreclosure means using every resource at your disposal to resolve the situation as soon as you can. Your absolute last option is going through with a foreclosure, which can seriously hurt your credit score and make homeownership an impossibility for several years.
If you want to avoid foreclosure or stop falling further behind on payments, continue owning and staying in your home, and get the cash you need to improve your finances, consider co-ownership. You’ll retain the option to buy us out of our equity share and can stay in your property without worrying about foreclosure.
Contact us today to learn how Balance can help you.