Foreclosure Prevention Measures in Cincinnati and NKY
Local Cincinnati and Northern Kentucky homeowners who are facing a financial challenge may find themselves in foreclosure.
What is foreclosure? Here’s a straight forward definition. 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 Cincinnati that you can take to keep your home from foreclosure.
Foreclosure prevention measures in Cincinnati and Northern Kentucky
Below is a list of 5 different foreclosure prevention strategies that could help protect your financial future. These methods may or may not work for you, but knowledge of them may help your financial future and protect your credit score.
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.
Often, banks uses a feature of the loan when you are late in payments that make the entire loan due now. In this situation, if you are behind in payments, how could you possibly pay for the entire mortgage? This is a situation where selling your home may make sens.
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.
Remember, you went into a contract with the bank saying that you would pay them the terms of your mortgage. They aren’t necessarily the “bad guys”. They are just looking to get what is rightfully theirs. Often, it is less expensive for them to work out a deal with you than it is to foreclose. So, if you can’t pay, this is an opportunity to negotiate a deal that works well for both of you going forward.
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!
Again, this is basically cutting a deal with the bank. In a short sale, the bank is typically going to forgive some of the loan in order to avoid the costly process of foreclosure. While you don’t get to stay in your home in this situation, this is a way to protect your credit score and not be foreclosed on.
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.
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.
Considering selling your Cincinnati house?
We buy houses in NKY and OH for cash and would love to see if we can help you during your short sale. Contact us by filling out the form on this page and we’ll see if we can work with you.