Foreclosure may sound scarier than it actually is, especially with a lot of misinformation surrounding the topic. The truth is, foreclosure isn’t always a hopeless, sudden situation. Sometimes people just fall on hard times. Let’s separate fact from fiction and debunk these common myths about foreclosure.
MYTH: Foreclosure ruins your credit
Missing payments and entering foreclosure harms your credit, but it doesn’t ruin it. Each missed payment lowers your score, but you can recover by paying bills on time and managing debt. Foreclosure typically disappears from your credit in 7 years, and its effect decreases over time.
However, if you sell your house for cash through WCC Properties, you can skip missing more payments and foreclosure. Instead, you can keep your credit in check, move, and find another housing solution that fits your lifestyle better.
MYTH: Foreclosure is the only option if you are struggling to make payments
Have you noticed your paychecks don’t stretch as far, and paying your monthly mortgage is getting harder and harder? You don’t have to go down the missed payments and foreclosure path. If you recognize the signs early, you can choose one of these options instead:
- Review your budget and look for ways to cut back in other areas so that it is easier to make your mortgage payment.
- Refinance to a lower rate, if that is possible.
- Sell! Get ahead and downsize to a house that has a more manageable monthly payment, or move onto renting.
MYTH: Foreclosure means you will be evicted immediately
If you have defaulted on your loan, you won’t be kicked out the next day. There are usually several steps in the process and warnings you get before the financial institution that holds your mortgage repossess the property. Financial institutions would rather you make regular payments than default on the loan, so they will send warnings and try to find ways for you to get back on track first.
During this process, if you keep missing payments, you can start looking at different solutions to your housing problem. Like selling. Traditional selling is a longer process that may not fit into your foreclosure timeline, but selling the house for cash is a quick, simple solution to get out of your house on your terms.
MYTH: You are irresponsible if you are in foreclosure
Life happens. It’s not people who mismanage their funds who wind up in foreclosure. It’s people who take on sudden debt, like hospital bills or unexpected maintenance costs. Or, it’s people who lose their jobs suddenly and can’t find work immediately. Many people get swept up in the emotions of facing foreclosure and struggle to find a better solution for their situation. If you find yourself facing foreclosure, stop and assess.
MYTH: Once the foreclosure process starts, you can’t stop it
There are many other routes you can take before eviction. The process, simply put, is:
- Defaulting on the loan – This is usually with 3-6 months of missed payments.
- Notice of default – Your financial institution will send you a notice of default. It serves as a reminder that foreclosure proceedings will occur if the past-due balance cannot be fulfilled.
- Foreclosure proceedings – Your lender will have to follow proper legal procedures.
- Sale or auction – The property will be scheduled for public auction. The lender will try to sell the property, or it will become a bank-owned property.
- Eviction – Once the property is sold, homeowners will get eviction notices.
This process can take months, and before the property gets sold, you can stop it. You can work with your lender to get an adjusted mortgage that is at a different rate or term. Or, you can sell the house yourself prior to the auction to pay the lender.
MYTH: Foreclosures sell at substantial discounts
Many think that buying a foreclosure house means they are getting a huge discounted deal from the bank. Since the lender is trying to recoup their costs, they will want to collect as much as possible to cover the overdue balance and as much of the loan as possible. Especially if the home is in decent condition.
At WCC Properties, you will get a fair cash offer for your house in 24 hours once you schedule an appointment. You can use those funds to pay off your debt to the lender and move on to your next chapter.
Don’t let foreclosure myths get you down. Let WCC Properties help you get out of a difficult situation with a quick process for a fair price.
