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When you’ve lost the Job and Can’t Pay the Mortgage Loan

A steady job is the most important parameter to keep up with the mortgage loan. If your boss has fired you or you have left the job due to the frustrating work environment, and you don’t have any other source of income to pay the mortgage then, we have some tips that can help sail your ship smoothly.

Stay calm and read the mortgage payment tips to understand what practical options are available for paying the mortgage loan when you’ve lost your job.

  • Calculate Your Money and Start Saving

First things first, try avoiding the stress as much as you can. Keep a positive attitude that everything is going to be fine. Without a stable mental state, you won’t be able to cope with the situation. Once you settle down, calculate the total money you have. By ‘total money’ we mean your savings and emergency funds. Once you know the total amount, outline your basic monthly budget and utilize the rest of the money for the mortgage payment. In the meanwhile, start searching for a new job. You will surely get one.

If this option is not feasible, you can try for the next one.

  • Sell the Unnecessary Items

There are many household items such as furniture or kitchen accessories and even clothes which we don’t use on a daily basis. You can collect such items and sell them right away. A garage sale might seem an insignificant thing to do in such a stressful situation but, it could help you arrange mortgage payment. If you are worried about the buyers then, you can try placing free ads over various portals and hold an online auction. Otherwise, you can opt for a traditional way of selling.

  • Rent a Room

To be honest, there are thousands of people in NY who are looking for a suitable place to live. So, if you have an ‘extra’ room in your home then, you can try renting it out. Let’s say your family is small and you have got enough space to accommodate more people. In such cases, you can permit people to stay in your guest room or the room which is spare. It will not only arrange mortgage payment but also, give you the satisfaction of helping a needy person.

  • Contact Your Lender

Most people make the mistake of hiding from their lenders when they know they are short of money. Therefore, we want to specially tell you that it’s not a wise thing to do. Maintaining transparency is the key to convincing the lender. Please, make sure you talk to your lender at the earliest. Understanding your situation, your lender might offer you another plan for a temporary basis. For instance, your lender can ask you to go for the forbearance unemployment agreement. It allows you to repay the pending payments after a certain time interval. For the time being, you can pay less money. This will save you from losing your house. Once you get a job, you can fill the gap by repaying the mortgage amount.

  • Sell the House Before it falls under Foreclosure

‘Foreclosure’ means your property can be taken legally by your lender if you fail to pay three consecutive mortgage payments. If the foreclosure occurs, you won’t have any choice but to lose your home forever. Thus, foreclosure is extremely risky. You should do whatever it takes to avoid foreclosure. If you’ve tried other authentic ways and still you aren’t able to find a staunch solution, selling your home in NY is the last resort. Selling your property before foreclosure or a short sale will at least ensure you get some money back. This money can be helpful during the crisis until you have a decent job in hand.

  • Contact ‘We Buy Houses for Cash’ Companies in NY

Selling your house in NYC as soon as possible could be a hard nut to crack. The easiest way to approach the situation is finding a ‘we buy houses for cash’ company in NY. Such real estate companies help you throughout the transition right from listing your house for sale to speaking to potential buyers to the important paperwork. You don’t need to go deep in the legalities once you hire an experienced real estate agent. Just make sure to get in touch with a trustworthy and reliable real estate firm in NY.

  • Fraudster Alert

While we are advising you to take assistance from a real estate company in NYC, you must take care of a few things. To be honest, there are many fraudsters who will promise to sell your house fast but, when the time comes they won’t fulfill their commitments. Such companies ask you to pay in advance and then, don’t answer your calls/emails. Beware of sugar talkers and research thoroughly about the company’s past projects and clients on the internet. You can also take guidance from your relatives and friends who have relevant knowledge or experience associated with the real estate sector.

Final Word

Try to get a new job and meanwhile follow these tips to deal with the mortgage payment failure issue. Remember that every dark cloud has a silver lining. If you need assistance, you can contact ‘Elite Properties’, one of the highly reputed real estate firms in New York. The real estate agents at Elite Properties are known for being transparent and faithful to the customers. Most importantly, don’t lose hope and stay positive. It can work wonders for you.

Even though the prices of real estate properties in the New York are rising steadily, it is still possible for an average American to achieve the dream of homeownership by opting for ‘pre-foreclosed homes’. Homes in pre-foreclosure are accessible at much lower rates than its actual market value. So, if you are looking to buy a property at affordable rates, home in pre-foreclosure can be a good financial deal for you. However, a realistic approach is necessary to make a financially sound decision.

Pre-Foreclosure Basics

Most people get confused between ‘foreclosure’ and ‘pre-foreclosure’. Well, there’s a thin line between the two. Foreclosure means a legal procedure that occurs when a borrower fails to repay the loan amount to the lender. The lender either sells the home in a property auction or takes the complete possession of it. Whereas, a pre-foreclosure ensue when a homeowner falls behind on mortgage payments. Generally, the pre-foreclosure period starts when the homeowner misses three consecutive payments and the lender issues a default notice to the home buyer asking to pay the debt. During this grace period, the property owner has two options, either he/she has to pay the debt within a specified time frame or sell the property. Therefore, pre-foreclosure can be considered as the initial stage that might lead to foreclosure.

Is it worth buying a Home in Pre-Foreclosure?

There’s a common misconception between most Americans that pre-foreclosure properties are only available in distressed condition and in an undesired neighborhood. Well, pre-foreclosure has nothing to do with the locality and its condition. For instance, a businessman invests in a real estate property located in a posh area of NY and unfortunately suffers a huge loss in business that leads to the failure of the mortgage payment. Regardless of the fact that he’s a businessman the property is bound to enter the pre-foreclosure phase. To be honest, financial setbacks can happen to anyone. Homeowners who go through such hardships usually prefer to sell their properties even at discounted rates. Otherwise, the property will completely slip off their hands and fall prey to the foreclosure process. So, you can actually get a good deal by investing in pre-foreclosed property.

Benefits of Buying a Pre-Foreclosure Property

Here are the major benefits of buying a pre-foreclosure property.

  • Less Competition: Competition is less since most properties are not listed.
  • Quick Buying Process: Simple and quick home buying process as most homeowners are desperate to sell the property as early as possible to avoid foreclosure.
  • Great Deals: You can negotiate and buy the property for less than its current market rate.
  • Better Neighborhood: Chances of getting property in a better neighborhood.

How to Buy a Pre-Foreclosure Home?

Here we’ll discuss how to buy a pre-foreclosed property.

  • Find Pre-Foreclosure Leads

First and foremost you need to find legitimate pre-foreclosure leads. It might be a daunting task as most pre-foreclosure properties are not listed. So, roll up your sleeves and start by preparing a list of areas where you want to have a home. Once it’s done, you can make an analysis by reviewing public records or local newspapers and then visit those areas personally to find out pre-foreclosed homes. This will give you a fair chance to check on the property as well as the neighborhood. However, if you want to simplify this process, we suggest you hire a ‘we buy houses for cash’ company.

  • Research the Neighborhoods

Shifting to a new home is a long-term commitment. Therefore, a good neighborhood is equally important as the home you want to move in is. So, do research about the neighborhood without fail. Look out for nearby schools, hospitals, banks, transportation facilities to avoid problems in the future. In addition to this, you should also closely inspect the condition of surrounding homes and buildings.

  • Find an Authentic Lender for Receiving a Pre-approval Letter

Finding an authentic lender is one of the trickiest aspects of buying pre-foreclosed homes. What happens is, you may want to buy a hot property worth $500,000 but, the lender may approve only $300,000. To avoid such unfortunate events, getting a pre-approval letter from the lender is necessary. A pre-approval letter is basically a legal document that helps you understand your maximum borrowing amount. The precise amount is calculated on the basis of your gross monthly income and debt payments. Therefore, you can actually decide your budget only after getting a pre-approval letter from the lender. Apart from that, it’ll also depict that you are qualified for buying the property.

  • Important Documents You’ll Need

You must possess the following documents in order to get the pre-approval letter in a hassle-free way.

  • Driving license
  • Credit report
  • Two pay stubs that reflect year to date earnings
  • Two years of tax return report
  • Recent bank statements

Sometimes, you might need to submit some other official documents. So, it’s always better to consult a real estate agent in NY to understand everything in details.

  • Decide on a Property

Of all the pre-foreclosed homes that you’ve seen, you must narrow down your search to a few homes. Visit each of them personally and do an inspection. You can also hire a trustworthy home inspection officer to ensure a right decision. This procedure will hardly take a couple of hours. Monitor everything minutely including the electrical system and plumbing. Then, choose the one that fits your budget and have the desired amenities.

  • Make an Offer

Making an offer is easy once you have a preapproval letter in your hand. You’ll know your financing options, and thus, you can outline the budget accordingly. Contact your real estate agent in New York and discuss how much you are willing to pay for the pre-foreclosed property. Your real estate agent will take your proposal to the seller. If your seller accepts your offer, then you’ll need to make a purchase contract.

  • Financing Commitment

Financing commitment is a crucial step. To get the specified loan amount you’ll have to send the purchase contract to the lender. The lender will examine the contract and ask you for the following set of documents before issuing a commitment.

  • Mortgage application
  • Property details
  • A complete list of assets and liabilities
  • Property appraisal
  • Application fee (May differ from individual to individual)

You can close the deal smoothly by following the above legalities.

Bottom Line

Buying a pre-foreclosure property is not just a safe financial investment but also an opportunity to have homeownership in New York. Be patient and refer the above guidelines to understand the technicalities of buying a pre-foreclosed home. Further, you can also contact ‘Elite Properties’, which is one of the most trustworthy real estate companies in NY for more experienced advice.

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