Local Alabama homeowners who are facing a financial challenge may find themselves in foreclosure. The biggest mistake homeowners in distress make is to do nothing.
Foreclosure is when the mortgage loan doesn’t get paid back and the bank begins the process to take ownership of the property to recoup its losses.
If you find yourself entering the foreclosure process, you might wonder if there is anything you can do about it.
In this blog post, you’ll read about a few foreclosure prevention measures in Birmingham that you can take to keep your home from foreclosure.
Foreclosure prevention measures in Birmingham Alabama
These foreclosure prevention measures might not all work in your situation but we’re telling you about them so you can make the decision for yourself:
1. Pay off your mortgage / sell your property. The quickest and easiest way to end the foreclosure process is to pay off your mortgage. After all, this is all the banks wanted in the first place so they would be happy to let you stay in your home and they get their money back. Admittedly, this is not always possible, which is perhaps the reason that you’re in foreclosure in the first place.
2. Work out a deal with your bank. Sometimes you can work out a deal with your bank where you sit down with a mortgage or foreclosure specialist and talk to them about changing the structure of your mortgage. Perhaps your payments get spread out so they are lower each month, for example. Just make sure that the deal works for you — you don’t want to just repeat the process.
3. Do a short sale. A short sale is when you sell the property and use the proceeds of the sale to pay down or pay off your outstanding amount with the bank. This keeps a foreclosure from impacting your credit score and it gets the bank off your back!
4. Give your deed in lieu. Another option would be a deed-in-lieu-of-foreclosure, which basically means that you will hand over the deed to your house to the bank and they agree not to put you through foreclosure. This will often only work if your house is worth approximately the amount owing on the mortgage. If not, the bank may pursue the difference.
5. File for bankruptcy. In some ways, a bankruptcy is far more dramatic than a foreclosure because it impacts your whole life. However, once you file for bankruptcy, the foreclosure process has to stop so it’s still a foreclosure prevention measure.
6. Consider the option of cash offer. With this option, you need someone who can pay cash, and can purchase your home immediately. Many homeowners trying to beat the clock on their foreclosure opt to sell the house to cash home buyers in Birmingham. They are private buyers who already have funds available, which drastically simplifies the selling process. There are no agents to satisfy, there’s no fees or commissions involved in the process. On top of that, Birmingham home buyers will generally pay all closing costs for you and can close escrow in as little as a week. They’ll often times negotiate with your lender on your behalf to push the deal through before the process moves along any further. This removes a major headache and allows professionals to handle the hassle for you.
7. Seek Government Services: In the state of Alabama, families that are about to lose their homes to foreclosure can call the 2-1-1 Contact Center (or 1-888-421-1266) and get connected to a helpful professional in the Foreclosure Prevention Partnership – where over 30 Alabama nonprofits and community partners are working together to help families avoid foreclosure.
If you’re not sure which one to do, consider this: If you can afford payments and you want to stay in the house then a foreclosure workout arrangement (#2) is probably your best option.
If you want to put everything behind you and move on with your life then consider selling your home and paying off your mortgage with that money.