Local Kansas City homeowners who are facing a financial challenge may find themselves in foreclosure.
Foreclosure occurs when the home borrower can’t make their payments and the bank goes through a legal process to take back the home to recoup their losses.
If you find yourself entering the foreclosure process, you’re probably wondering if there is anything that you can do about it!
In this blog post, you’ll read about a few foreclosure prevention measures in Kansas City that you can take to keep your home from foreclosure.
Foreclosure prevention measures in Kansas City Missouri
These foreclosure options will not work for everyone in every situation, but by knowing the available options, you’ll be able to make the best decision.
1. Pay off your mortgage / sell your property. Of course the most straightforward solution is just to pay off the home loan. If you don’t have the money, you may need to sell the home in order to pay back the loan. Once the bank has their money, they’ll stop the foreclosure process which will save your credit.
2. Work out a deal with your bank. Sometimes you can work out a deal with the bank. You’ll need to call them and speak with a loan specialist about a loan modification. For example, they can extend the length of the loan so that the monthly payments are less. You want to make sure that this new loan structure works for you so that you don’t end up right back in the same boat.
3. Do a short sale. A short sale is another deal you’ll need to work out with the bank. They are less common these days, but it doesn’t hurt to ask. A short sale is when you sell the home for even less than the loan payoff amount. The bank will keep all of the money from the sale and forgive your loan. You may owe taxes on the unpaid amount though so be careful using this option.
4. Give your deed in lieu. Another option would be a deed-in-lieu-of-foreclosure, which basically means that you will hand over the deed to your house to the bank and they agree not to put you through foreclosure. This will often only work if your house is worth approximately the amount owing on the mortgage. If not, the bank may pursue the difference.
5. File for bankruptcy. Because there are other, potentially better options, bankruptcy is often a measure of last resort. Once you file for bankruptcy though the lender will stop the foreclosure process so this is a foreclosure prevention measure. Bankruptcy may be more devastating to your overall financial picture though.
If you’re not sure which one to do, consider this: If you can afford payments and you want to stay in the house then a foreclosure workout arrangement (#2) is probably your best option.
If you want to put everything behind you and move on with your life then consider selling your home and paying off your mortgage with that money.