Dallas Foreclosure & Short Sale Expert, Maria Barrera

 While foreclosure is a frustrating and stressful process, it’s important to know all your options when you start falling behind on your loan payments. Maria Barrera, has compiled an overview of options to avoid the damages foreclosure brings to your credit score and future real estate opportunities. 

Foreclosure happens when a property owner can no longer make the monthly payments toward their mortgage or property taxes. Because mortgage loans are secured with the property as collateral, the lender seizes the property and sells it to reduce the financial loss from the defaulted loan. 

In most cases, a lender will wait 120 days without receiving payment before filing a Notice of Default, which cancels your mortgage and entitles the lender to sell the property. If you can avoid foreclosure, it’s essential to take the first steps before the Notice of Default is filed.

If you are behind on your mortgage payments and fear foreclosure, there are some options to consider that can help you get back on your feet. The most crucial step to avoiding foreclosure is to act as quickly as possible. Don’t avoid communication out of embarrassment or hope that your situation will improve. Your lender will be able to give you more flexible repayment options the sooner you reach out to them.

If alternative loan agreements aren’t an option for you, you may be considering a short sale of your home. A short sale sells your property at a price that is less than what you owe to the mortgage company, and the lender has to agree to the terms before you can proceed with the process.

Short sales allow you to alleviate your debt to the lender without damaging your credit score as severely as foreclosure, but they still damage your score and your chance of getting a second mortgage on your next home. Short sales also limit any benefits you as a buyer will get from the sale: since you’re selling at less than what the home is worth, all profit goes back to the lender.

If you can’t make your monthly loan payments, consider selling your home. You can avoid the financial drawbacks of foreclosure and use any profit from equity to downsize or buy at a later time. Even if you don’t make much from the sale, avoiding foreclosure is more beneficial to bad credit.

If you’re looking to sell your home to avoid foreclosure, real estate agent, Maria Barrera is SFR certified (Short Sale and Foreclosure Resource®) and has many years of experience helping homeowners avoid foreclosure since 2010. Call Maria today!