So what is a Pre-Foreclosure in Charleston anyway?
Many homeowners in Charlestonand across the country are having difficulties making their monthly mortgage payments and keeping their other finances afloat.
If a homeowner missed payments for 3-6 months, they will usually get issued a warning from their lending institution. This warning is to notify the homeowner to pay or they will lose their home. This period is known as “pre-foreclosure.”
Three months is the typical amount of time that banks and mortgage lenders give the homeowner to become current. This number can vary based on the bank or the situation sometime but not often.
If a homeowner fails to make the necessary payments, the bank will foreclose on the home to take title to their collateral, and evict the homeowner. Thankfully, during this stage of the foreclosure process, a mortgage holder has the opportunity to take advantage of several options to prevent losing their home.
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,” (meaning you have equity in your house) you may be able to refinance your mortgage, receiving lower monthly payments. This is often an unlikely option due to the damage that has happened to their credit because of the delinquent payments. Check with your local Charleston mortgage broker… or contact us and we can connect you with a reputable one.
- You may be able to quickly sell your home to a real estate investor that’s reputable in Charleston like us at Charleston Home Buyers, 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 Charleston SC 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 who may not even qualify for financing in the end.
- You can contact the bank and ask them to permit a short sale. In a short sale, you’ll sell your home for less than it’s worth, and the bank will take the loss as a tax write-off. In some short sales you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan. We try to negotiate them to satisfy the entire debt so it doesn’t follow you and you can get a fresh start. We are very good at this and usually successful.
- You may be able to declare bankruptcy, which can buy you some time to pay your debt. Bankruptcy will remain on your credit report for years, and causes significant damage to your credit. And the lender can petition the bankruptcy court to remove your home (their collateral) from the bankruptcy agreement so that they can foreclose in which case you get two major black marks on your credit.
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.
As a tip, if you are applying for a loan modification or other workout with your lender, be sure to provide them all of their requested information at one time vs submitting it to them in drips thereby avoiding your file being placed on hold or considered incomplete.
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 at least 5-7 years and most future applications for credit and some employment applications ask if you have ever had a foreclosure. It is important that you are able to check “No” 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 Charleston area house – We buy houses in Charleston 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.