With thousands of properties across the country going into foreclosure every day, it’s important for both property owners and buyers to understand the process and be able to answer the question: what is a pre-foreclosure?
So what is a pre-foreclosure in Reston anyway?
Many homeowners in Reston run into difficulty making their regular monthly mortgage payments for one reason or another. It may be due to job loss, illness, divorce, or many other personal reasons or factors.
Once a mortgage holder has missed 3-6 consecutive months of mortgage payments, the lender will issue a warning notifying the homeowner to pay or potentially lose their home. This period is known as “pre-foreclosure.”
Banks and mortgage lenders typically allow three months for the homeowner to bring the loan current. This number will vary depending on the bank and the situation.
If a homeowner fails to make a payment or figure out another arrangement, the bank will foreclose, taking back ownership of the property, and evicting the homeowner. During the pre-foreclosure period, a mortgage holder has several options to prevent the loss of their property.
Pre-foreclosure Options for Borrowers
If you find yourself behind on mortgage payments, the first thing that will alert you that the foreclosure process has started will be a “notice of default” from your mortgage lender.
This document will state that you have not made a mortgage payment for the last 90-180 days. Do NOT panic. You still have plenty of time to find a solution.
Here are a few options that can delay or even prevent losing your home:
- If your mortgage is “above water,” (meaning you have equity in your house) and you have good credit, you may be able to refinance your mortgage. Check with a trusted local Reston mortgage broker or contact us and we can connect you with someone.
- You may be able to quickly sell your home to a real estate investor in Reston such as Sell Simpli. We will pay the 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 Reston VA area home quickly, as-is, often in just a week or two. We will pay in cash and take the stress out of trying to list the property and find a buyer on the open market.
- You can contact the bank and ask them to permit a short sale. In a short sale, you would sell your home for less than it’s worth and the bank will take the loss as a tax write-off. In some cases 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.
- You may be able to declare bankruptcy, which can buy you time to repay your debt. The downside of filling bankruptcy is that it will remain on your credit report for several years and can cause significant damage to your credit. Call a local bankruptcy attorney for information on filing bankruptcy in your city.
Lenders across the country are aware of the widespread financial troubles and are often willing to work with borrowers to help them find a solution to keep their property.
If you’re honest and communicate with the lender, you’ll find that there are options to remain in your home, or at least help salvage your credit.
A foreclosure can negatively affect your credit score by 200-400 points and can prevent you from obtaining a loan of any sort for up to 7 years. Be diligent if you’ve received a Notice of Default from your lender, procrastination leads to more problems.
If you’re not able to find a solution with your lender working directly with them… connect with us. We may can help or point you in the right direction.
Ways Sell Simpli Can Help If You’re In Pre-Foreclosure
- We can help facilitate 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 Reston house with cash – We buy houses in Reston and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>
- We can buy your property subject to the existing mortgage – this will allow us to pay more for your property and even help repair your credit. Ask us how this works!
- You can ask us questions and we can provide you FREE guidance and resources to help you make a well educated decision. There is no cost and absolutely no pressure or obligation.
If you’re in the pre-foreclosure stage, don’t stress, you have time to fix the situation.
First connect with your bank to see if they’re willing to work with you. If you are having difficulty, contact us and let us help you walk through the process and discuss your options.