The short answer is yes! You have options to avoid a foreclosure in Birmingham.
The word by itself can stir up a very stressful and distressing feeling when you begin taking into consideration what all it can mean — a long struggle, ending up broke and/or unemployable, and, in worst cases, even homeless.
Thankfully, there are other options if you’re struggling to pay your mortgage payments in a timely manner. And, even if your Birmingham house has already gone in the foreclosure process, you can still come out of it triumphant. The initial remedy is to lower your stress as much as possible by attempting a short sale. This means you will sell your Birmingham home and the bank will take the cash you earn on the sale.
Here’s How You Can Avoid a Foreclosure in Birmingham:
Step 1 on How To Avoid a Foreclosure in Birmingham
First, make certain that you understand the concept of a short sale. Your Birmingham property must sell for enough money to take care of the mortgage. If what you earn isn’t equal to the loan total, you will have to generate the disparity yourself. So, see to it that your house will bring in enough to pay for the balance.
Step 2 on How To Avoid a Foreclosure in Birmingham
Secondly, you have to get approval from your bank before trying a short sale on your Birmingham house. If you still are not in default, they’ll be much more willing to work with you. You can ask for permission more than one time in the case that you are turned down the first time. If the creditor forecloses and the property goes into auction, the leading bidder will own the property irrespective of how low their bid was — so a short sale may be an enticing solution for your loan company. Even so, you will have to show an authorization letter, hardship letter, statement of the home’s worth, a purchase offer/contract, and a settlement statement.
Step 3 on How To Avoid a Foreclosure in Birmingham
Thirdly, once you have been given authorization, you will need to begin looking for a realtor and a lawyer who specializes in home sales in Birmingham. With these specialists on your side, you have a much higher chance of being successful and getting out of your house with no harm to your financial record. From time to time, you’ll have the ability to pay them with the profits from the home’s sell.
Step 4 on How To Avoid a Foreclosure in Birmingham
Fourth, you will have to determine a list price for your Birmingham house that is equal to or more than your mortgage balance and any selling expenditures, like the cost of your real estate broker. If your asking price is below what you need, you will need to begin setting the difference aside out of your own pocket.
Pros and Cons of a Short Sale on Your Birmingham Home
The short sale method does not allow you any profit, which is its leading con. However, always remember that you will in no way benefit from a foreclosure, either, and you’d in fact leave with a lower credit score and likely in an even worse financial scenario. That’s because having a foreclosure on your report suggests that it will be harder to rent or purchase a house — in Birmingham or elsewhere. On top of that, loan providers sometimes might insist that you pay them using some of the assets you have disclosed to them if the short sale does not cover the Birmingham house, meaning you will need a great legal representative with you.
The majority of loan providers see short sales as a preferable substitute to foreclosing, which means you will have the ability to step away (in a lot of situations) without a foreclosure on your financial record.