Can I give my Houston TX house back to the bank without an expensive foreclosure?
The answer is YES ! (but with caveats, read below for more details)
There are many ways to avoid an expensive foreclosure in Houston.
Your first step if you’re trying to avoid foreclosure in Houston is to speak with your loan provider immediately to examine your choices to prevent home foreclosure.
You have to take action prior to getting too far behind on your mortgage payments in order to halt house foreclosure. You should contact your financial institution once you know you are likely to miss a home loan payment and inform them what is going on with your financial situation.
Your mortgage loan organization would rather work something out with you so they do not generate losses on your property by going through the actual foreclosure process.
You need to be open and honest with your mortgage company.
They may work something out with you that cuts down your rate of interest, which would reduce your monthly payment. In case you miss one or two payments but then are capable of start paying once again, they can usually add those repayments back onto your home loan and consider you caught up on your mortgage. The financial institution will not accommodate you if you do not talk to them about what your situation is ahead of time and ask for help.
Your mortgage loan bills or your card payments?
You’ll be able to prevent home foreclosure by ensuring you consistently pay your mortgage loan prior to any bills. Your house loan is an essential monthly bill you have. Credit cards should never take priority over your house loan repayment. You can deal with the consequences of not paying your cards a lot easier than you can the implications of failing to pay your mortgage.
Not paying your mortgage loan is the worst thing you can do with regard to your credit score. Getting behind on other sorts of debt like credit cards will never harm your credit as much as getting behind on your home loan. Not paying your mortgage loan could cause you difficulties with your credit cards in any case, so they ought not to be a priority when you have to pay your monthly dues.
Foreclosure – The Mother of all Credit Hits!
Let’s face it, most Texans probably never think about how foreclosure can affect them and many don’t know that the actual nightmare of foreclosure begins after the foreclosure sale is complete. It sneaks up on many because the foreclosure sale takes place only 21 days after the notice of default is sent. The 7 to 10 year nightmare of foreclosure actually begins after the sale with the local sheriff dragging you, your family, and all your belongings out to the curb in front of your friends and neighbors. And that’s not all:
- The sale of your property at the foreclosure auction may not satisfy the loan principal. This may cause the bank to sue you for the deficiency which is the difference between what you owe them and the proceeds of the sale. And the truth is, you do legally owe this deficiency so the courts will file a judgement against you on the bank’s behalf. Get ready for thousands of collection agencies to begin hounding you day and night – it’s what they get paid to do!
- The bank also files a 1099 on your behalf for up to the full value of the loan. The IRS considers this unpaid debt as income – in their words “cancellation of indebtedness income.” During the heat of the 2007 – 2012 housing slump, homeowners defaulting on their primary residence were forgiven this tax but it is now back in full effect. For folks who have been unable to make their house payments, owing the IRS a major tax bill that increases daily with penalties and interest is a major problem. And the IRS does not sit idly by waiting for you to pay…they immediately attach your bank accounts and begin garnishing your wages.
- With your credit score plummeting possibly 200 or more points, the legacy of a foreclosure follows you closely. Most apartment/housing landlord standards for tenants require a better credit score than you will likely have so finding a place to live can be difficult. Buying a car or needing any credit at all becomes a problem.
- Employers view low credit scores and foreclosures negatively, especially for jobs requiring the employee to handle money. Just having a foreclosure on your record may limit your ability to get some jobs.
We no longer have the “debtor’s prisons” but life after foreclosure can seem like one. Knowing the actual consequences of foreclosure is a convincing argument for avoiding it altogether.
Is selling your house in Houston TX a way to avoid foreclosure?
One way to prevent home foreclosure is to try to pay your house loan off by putting your property up for sale.
You could probably be free from the financial hole you are in by selling your house for sufficient cash to pay the home loan off. And sometimes you may be able to have money left to start over again. This is an excellent approach to prevent foreclosure of your Houston house and avoid a disaster on your credit score at the same time.
Another way to stop property foreclosure in Houston is to really cut your spending right down to the bare minimum. If you’re able to reduce your expenses adequately you could avoid having to offer to sell the house you love. For anyone who is self-employed, one method to spend less would be to stop renting an office and make a workplace at home. You could also think about selling a car and having just one that you share.
You can definitely proactively do something to stop your home from going into foreclosure and harming your credit and financial situation even further.
We Buy Local Houston Houses… Can We Make You An Offer?
Here at D&G Smith Homes we buy houses in Houston TX and surrounding areas and we may be able to help you get out of your house and avoid foreclosure.
The process is really simple:
- Fill out the form over here, or call us at (832)497-2163 and we’ll make you an offer within 24 hours
- If you accept the offer we’ll get the documents drawn up and come out and visit you in your home to go over the paperwork
- We buy your house when you want us to (in as little as 7 days) at a reputable local closing agent