Are you losing sleep over the prospects of a home foreclosure?
Foreclosure can have devastating consequences on your credit report and hurt your ability to get financing in the future.
In 2016, nearly 380,000 homeowners forfeited their property to the bank due to foreclosure. Additionally, another 479,000 were going through the initial steps of the foreclosure process.
Altogether, approximately 1 million Americans were facing the threat of foreclosure in 2016. In the height of the Great Recession of 2009, that number was even higher.
However, cash home buyers present a great opportunity to avoid foreclosure and the negative financial consequences that come with it.
What is Home Foreclosure?
Foreclosure is a process initiated by a mortgage lender when the homeowner misses payments. The process ends when the homeowner is unable to sell the property or pay off the outstanding balance.
At this point, the lender seizes the property and you must vacate the premises.
The process is very costly and usually results in a large financial loss for the lender. Typically, foreclosure auctions net significantly less than the value of the home.
What Impact does Foreclosure Have on the Homeowner’s Credit?
Unfortunately, those who suffer through the foreclosure process will deal with its aftershocks for years to follow. A foreclosure will immediately knock down your credit score by 250 to 280 points.
Most industry experts estimate that it takes a minimum of 3 years to restore your credit. During this time period, you have to make continuous on-time payments.
Only this consistent dedication will allow you a chance at obtaining a mortgage with fair terms again.
Cash Home Buyers are the Best Way to Avoid Foreclosure
As we alluded to before, mortgage lenders want to avoid foreclosure at all costs. Lenders actually give homeowners a number of different opportunities to square up the loan. This includes a chance to sell the home and pay off the outstanding balance.
Cash home buyers are one of the best ways to satisfy your debt obligations, as well as satisfy the lender.
Not only can you avoid foreclosure, but there are a number of other advantages to reaching an agreement with a cash buyer.
For instance, cash purchases can be processed much quicker than a mortgage application. A cash transaction is roughly three weeks faster than closing a mortgage.
Another advantage is that a cash offer is much more certain than a mortgage application. There are many variables to financing and it is possible that the buyer’s application gets denied.
In addition, mortgage applications require a home inspection. This inspection may find many faults with your home. As a result, the buyer may request these be fixed.
In a cash transaction, you can sell the house in its current condition.
Clearly, home foreclosure is something you want to avoid at all costs. A foreclosure will wreak havoc on your credit and hinder your ability to get a new loan for years to come.
Securing a cash buyer is a much better option. Please contact us with any questions about entering into an agreement with a cash buyer.