How to Avoid Foreclosure in Florida

by | Apr 11, 2022 | Blog

Just the term “foreclosure” is enough to frighten any homeowner. Besides the impact on your actual credit score, having a foreclosure on your credit report casts you in a negative light with future lenders. So not only do you lose your current home in the case of a foreclosure, but it significantly impacts your chances of financing a new home within the seven years that it stays on your report.

If you are a Florida homeowner struggling to make your mortgage payments, you can take steps to avoid a foreclosure. Consulting with a professional is always a good idea for understanding your options.

Understanding the Foreclosure Process

Foreclosure is initiated by the lender when a borrower has missed payments on the loaned amount. Foreclosure can also be triggered when a borrower doesn’t meet other terms in the mortgage contract. In Florida, foreclosures are judicial proceedings, meaning the lender has to have approval from a judge to move forward with foreclosure.

As the foreclosure process progresses, there are still steps you can take to prevent the process from reaching its conclusion. Knowing what those steps are and how to access them can be the difference between losing your home and any equity that you have built, and maintaining control of your financial future as it relates to your home.

Stay Aware of Where You Are Within the Time Frame

Once you know how the process works, stay aware of where you currently are in the process. Certain options exist for avoiding foreclosure, but you have to know what they are and how to access them and how long you have to make that happen.

Federal law prohibits a lender from beginning a foreclosure until the borrower is more than 120 days delinquent. However, your lender can, and usually will notify you when you miss your first payment, then again when you are 30 days past due, then 60 days, etc.

In Florida, once the borrower receives a letter from the bank informing them that they have defaulted on the loan, the borrower has 30 days to catch up on their payments. If that doesn’t happen, the bank/lender will file the foreclosure. Usually, though, the lender waits to file until 60 days after that – at the 90-day mark.

Tighten Your Budget

It is vital that you respond to your lender when you receive that first letter about your missed payment. Better yet, if you are struggling and know you won’t be able to make a mortgage payment, contact your lender then to see what arrangements can be made. Many lenders are often willing to work with borrowers where possible.

Some lenders may even consider a loan modification, which changes one or more of the terms of your mortgage agreement. This is designed as a long-term solution and can reduce the interest rate, remove late fees, and lower your monthly payment among other possible changes. Working with a professional for this option is important as it is not always a straightforward process. And even if this becomes an option for a struggling borrower, it will likely involve tightening your budget in order to stay current under the new terms.

However, when faced with life-altering situations, even that may not be a viable option for a borrower. There are other options though to avoid a foreclosure on your credit report.

Rent or Sell

If other options just don’t seem possible, a struggling borrower facing the possibility of foreclosure can also choose to rent or sell the property in order to pay the remainder of the mortgage and escape foreclosure.

Renting out the property could provide funds to keep paying the mortgage payments. However, with that option comes significant time and risk factors. Simply listing the home for rent does not guarantee you will immediately have tenants. Nor does it guarantee that those tenants, if you do get them right away, will be reliable. There is also the risk of damage caused by tenants, which would incur more expense rather than alleviating the existing financial burden.

Selling the property through traditional challenges, though definitely an option, likely is not your best choice when facing the possibility of foreclosure. Finding an agent, getting all inspections taken care of, listing the property, having an open house, all the steps that accompany that route take time and are not guaranteed to find the right buyer for you. And, should those buyers become aware of potential foreclosure, the offers you receive will be significantly lower.

Selling to a cash buyer can provide a quick, effective solution. A cash buyer, like American Made Home Solutions, offers a fair, cash price for your home and is able to close quickly on the sale since we don’t rely on bank or other traditional lender financing options.

Conclusion

Life happens, and sometimes life events cannot be avoided that make it difficult or even impossible to stay current on your mortgage payments. Foreclosure is a frightening thought for any homeowner – you stand to lose your home, your equity. In that home, and even your potential to purchase another home during the seven years that foreclosure stays on your credit report.

If you find yourself struggling to make your mortgage payments you do still have options, including a quick and fair cash offer for your home that can remove the threat of foreclosure on your credit report. American Made Home Solutions is a no-nonsense home buying company that offers cash for houses. If you need to sell your house fast for cash, we’re your local home buyers serious about buying your home. No repairs, no open houses, no agents, no fees, no commissions.

Contact us today at American Made Home Solutions for a judgment-free consultation.

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