Foreclosure is a very unfortunate situation in a homeowner’s life. As stated in foreclosure statistics, 1 out of 200 homes faces foreclosure every year. The reason for foreclosures is the financial edge that most homeowners undergo.
What is foreclosure?
In simple terms; Foreclosure is an act of taking ownership of a mortgaged property. The lender or the bank has the right to sell the property for recouping the money and interest respectively.
How does it work?
The Foreclosure process consists of a legal course. The lender takes control of the property by evicting the homeowner, further selling or auctioning the property. Foreclosures generally occur when the borrower (homeowner) fails or stops paying the mortgage payments.
If you are one of them who are seeking help then read the options to consider when facing foreclosure below –
Defend Yourself in Court
Although homeowners are in a melancholy while facing foreclosure, they still have some options accessible to stop foreclosure. The first option is to fight back to the bank. If you think the bank has made an error like sending untimely notices, improper service of notice and loan closing breach of contract, etc. You can defend yourself in the court and countersue the bank for unethically handling the case.
Rent Out the Property
One of the best possible option to stop foreclosure is to rent your property. By renting you are generating a passive income which will possibly cover your monthly mortgage payments. Talk with your lender clearly before moving out. They might charge you with higher interests as you won’t reside there anymore. Also, make sure you offer a mutually feasible rent that would satiate the mortgage payments as well as your personal needs inclusively. Employ your asset and lodge a part of it, it will surely help you in making faster repayments.
Consider Refinancing and Loan Modification
Opting for refinancing will lower your burden of paying heavy installments. If you have ample amount of equity and you’re not much behind the payments then refinancing is the best option. By refinancing you are requesting for a brand new loan with lesser interest rates that help in faster payments.
You can also choose loan modification as per your preference to stop home foreclosure. As similar as it sounds, refinancing it is completely different from it. In loan modification, the lender modifies the prevailing mortgage so that the payments become more affordable. In most cases, the time span is also altered and made feasible.
Consider a Short Sale
Another option to avoid foreclosure is opting for a short sale. What is short sale? A short sale is when a homeowner sells its property for a lesser amount when he or she is on the verge of being financially distressed.
Here, the buyer is a third party; all the profits from the sale go to the bank (lender). If there is still some outstanding debt on the homeowner, the lender will forgive the difference or will file for a deficiency judgment against the homeowner. If the lender files the deficiency judgment then the homeowner is liable to pay the remaining amount within the given time span. Although, your credit score is affected for some years during a short sale, it is better than ending up with a foreclosed property.
If you are considering a short sale then you have nothing to worry. You can contact us here at Elite Properties NY and we will take care of the rest of the proceedings.
Selling a Foreclosed Property
There are multiple ways to stop foreclosure some are effective some are not, it relies on the situation you are in. If you sight foreclosure nearing, you should act fast and sell your home to cash buying companies. Companies like ‘Elite Properties’ buy houses within 3 days in all cash-offer. Once you sell the house to us you receive hard cash, which is always a great deal. Selling home to cash buying companies crafts the deal on the current value of the property. They provide you with certainty concerning the costs and timescale. Furthermore, you can pay your outstanding debt with the help of that money and start afresh.
If you are suffering from any other real estate crisis and need assistance we will be happy to help you in your tough times. Get in touch with us, rest assured we’ll provide you with the best possible solutions.
The word ‘foreclosure’ may seem a nightmare, especially if one’s willing to buy a home in New York. However, there’s no need to fear a foreclosed property. Today’s scenario is completely different in comparison to the real estate market milieu that existed five years ago. At present, banks have started a renovation policy before shortlisting the home for property listings. At first, they inspect the home in foreclosure and do all the necessary repairs which is a huge advantage for buyers as they don’t need to spend money on repairs after buying the foreclosed property. That being said, some of you might still be in a dilemma of whether to buy a foreclosed home or not. So, we have rounded up top 5 advantages of buying a foreclosed home. They will help you make a sound investment decision.
Go through the following key advantages of buying foreclosed home and then make a decision by yourself…
1. Great Investment Opportunity
A foreclosed home is a great investment opportunity for buyers because it’s available at cheaper rates than the actual market value. How’s that possible? It’s quite natural to have this doubt. So, let us explain to you some details of the foreclosure process. Foreclosure occurs when a homeowner fails to indemnify the mortgage payments, and the bank/lender puts the property for sale for compensating the financial losses. This is why they sell the property at low rates just to get the remaining amount out of it. Further, your monthly mortgage payment would also be less.
2. Move-in Ready House
Getting a move-in ready house is a compelling reason to buy a foreclosed house. As discussed earlier, nowadays, the lenders/banks do all the necessary repairs in advance. Why? In today’s world, everybody seems to judge a book by its cover! One may not pay even the marginal rate if the home is in a distressed condition. Therefore, the lender makes all the required repairs beforehand. This clearly depicts that you don’t need to invest money as well as your precious time to get things done. You can shift to your home as soon as you complete the legalities.
3.Foreclosed House in New York
We have good news for foreclosed property buyers which could be a bad one for the foreclosed property sellers. According to a recent real estate survey, nearly 40% properties in New York City are in foreclosure. To be honest, this is quite a big figure. This interprets that foreclosed home buyers have a plethora of good properties to choose from. One can bargain and purchase a foreclosed house which suits their needs.
4. Better Neighborhoods
Foreclosed homes can be a boon if you have always dreamt of living in a posh site in NY. Let’s say there’s a home located in the central area of NY with a net worth of $500,000. If that home falls into foreclosure, its prices could lessen up to $250,000. You can encash such opportunities and be a proud homeowner in NY. In a nutshell, you can easily afford foreclosed properties in elite localities which otherwise could be costly and even beyond your budget.
5. A Step towards Bright Future
Even if you don’t want to shift your house, investing in a real estate property could be fruitful. You can buy a foreclosed home in a good locality and give it on rent. This way, you’ll be able to make a passive income and have a property of your own. This is perhaps the best way to gain financial security.
How to Proceed?
First and foremost, decide on the type of foreclosed property you want. After that, make a note of all the amenities and features you seek in a home. Once you are clear about your home goal, contact a reputed real estate agency in NY for exploring your foreclosed property buying options. They’ll not only help you throughout the foreclosed property buying transition but also, rationalize all the paperwork and legalities.
Do you seek a property in NY with a good neighborhood? At low prices? Keeping in mind all the above-mentioned benefits, a foreclosed home is the ultimate answer! Bear in mind that – Two heads are better than one. Therefore, contact a trustworthy real estate company in NY such as ‘Elite Properties’ to get the most out of the foreclosed home deal.
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.
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 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.
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.
Have you recently received a foreclosure notice on your home? Well, panicking will never save your home from being in foreclosure. So, take a deep breath and cool off yourself, as many things have to be done before you quit yourself…
Owning and living in the same home is one among the American dreams. But, the recent studies have shown that it has created a sense of fear and frustration as they keep on trying to meet the ends and avoiding the foreclosure nightmare. If you think you are the only one who is in this situation, then you are wrong. People from all income levels are suffering from the clutches of homes in foreclosure even as we speak. And people feel more helpless when they try to get the help of internet to understand the foreclosure process. Since many real estate terms and jargons are involved, it is indeed difficult for an ordinary man to grasp and understand every crisp detail.
Well, numerous non-profit based firms provide foreclosure assistance for all. Through this article, we’ll try to lend you a few helpful tips to make you understand foreclosure isn’t the ‘end of times.’
Here’s what you need to follow when facing foreclosure…
1. Go Through the State Laws
You must know that every state has its own foreclosure laws. So, before jumping to conclusions, it would be wise to go through the State’s Laws on foreclosure. Depending upon the State, the home foreclosure can be either judicial or non-judicial.
As for a non-judicial foreclosure, there are no courts involved. The lender doesn’t have to go through the courts to file the foreclosure. He can send you a ‘notice of default’ (which is a notice mentioning the failure of payments) along with a ‘notice of sale.’
When it’s judicial foreclosure things get more complicated. You’ll be sent a complaint along with a summons to the court. It means that the lender has already filed a lawsuit against you. You shouldn’t miss the deadline for the response at any cost as the court will pass the law in favor of your lender and allow the foreclosure to proceed.
2. Foreclosure Doesn’t Happen Overnight
Foreclosure doesn’t happen overnight. And this is a fact. Foreclosure only begins when you miss a couple of months of payments. Usually, the lender will send you a notice of default when you miss four or five months of payment. They’ll also specify an amount that you need to pay for to cover up for the defaulted loan and a deadline along with it. Once you failed to meet the requirements, you can expect foreclosure process to begin any time.
So, you’ll have a minimum of four to five months (depends on the lender) after the last payment to cover up your default payments
3. Judicial Foreclosure a Boon?
Once you understand you are under either judicial or non-judicial foreclosure, the first thing to do is not to panic. Judicial foreclosure usually comes under foreclosure by bank. But, let us make one thing clear, the latter situation might be less advantageous as these happen way quicker. However, you’ll be the legal owner of the foreclosed property has been terminated by a new sale deal.
In judicial foreclosures, the court proceedings can take as much as a year. It will aid you in finding a new home. But, still, if you fail to find an alternative home within the deadline of foreclosure, you’d be welcomed with an eviction.
4. Call Your Lender
A lot can happen over a call. Don’t back yourself from calling your lender and asking for a relaxation. Explain your situation, try reasoning with him for an extended mortgage pay off time. Hopefully, he/she might agree. This might even help to delay foreclosure. Well, it’s worth a shot right!
5. Chapter 13’ Your Last Resort
Chapter 13 can be your last resort. A lawyer can help you file a Chapter 13 bankruptcy, which will in turn force the lender to negotiate a payment plan. But, use this as a last resort only. Being stated as bankrupt can hurt your credit score and filed suit against a lender can drag you into much more deeper troubles. You’ll also have an option to put your home on short sales.
With a little bit of preparation, you can survive the whole foreclosure process. You’ll have enough time to prepare for it, and you only need to vacate the property till there’s a new buyer. So, save up some money and look for a better and affordable rental. As for lenders, to find a buyer for a property under foreclosure is pretty tricky. There are many agencies and skilled real estate agents to ease up the pressure and help you get a new buyer. You can contact real estate professionals like ‘Elite Properties’ for more experienced advice and foreclosure help.