Local Kansas City homeowners who are facing a financial challenges may find themselves in foreclosure. It is always useful to know what options may be available if you ever need to prevent a foreclosure in Kansas City.
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 learn how you may prevent a foreclosure in Kansas City.
Prevention Strategies for avoiding foreclosure
These prevention strategies for avoiding foreclosure might not all work in your situation but we will share those that we are aware of so that you might have a couple of options to choose from:
1. Pay off your mortgage / sell your property. This is the most obvious solution for you. If you can sell your home for enough to pay off your current mortgage, then you won’t have to worry about foreclosure. Of course, the downside to selling is that you will have to move somewhere new. Depending on the market, it may not be easy to find a house that is cheaper than the one you have already fallen behind on.
2. Work out a deal with your lender. Your lender understands that sometimes circumstances change and things happen that are unavoidable, so most have programs available that you can seek temporary assistance. This might be a forbearance or the structure of your mortgage could be changed. Perhaps your payments get spread out so they are lower each month, for example. Before you agree to any loan modifications, make sure you understand fully what will be expected of you so you can successfully meet the requirements.
3. Do a short sale. A short sale is when you get permission from the lender to sell the property for less than you owe. While this does keep you out of foreclosure, you should acknowledge that your credit may show that you paid less than was owed. This might slightly impact your ability to secure a loan for a home, car, or other reason in the future.
4. Give your deed in lieu. Another option would be to give over your deed-in-lieu-of-foreclosure. This basically means that you will hand over the deed to your house to the lender and they agree not to put you through foreclosure. This is a great option for the lender if you have a great deal of equity, but not really great for you as you will lose it all. This could be a win-win if you owe close to the amount the lender could resell the house for.
5. File for bankruptcy. In some ways, a bankruptcy may seem more drastic than a foreclosure because it impacts your whole life. However, once you file for bankruptcy, the foreclosure process has to stop. Depending on what kind of bankruptcy you file, you may also get to keep your house in this process.