Most Texans have the dream of owning their own residence. Realizing this dream by taking out a home loan to purchase a residence, however, can prove disastrous in the event of an ailing economy or if the homeowner loses his or her job. As soon as a financially struggling homeowner gets behind on mortgage payments, the lender will foreclose on the property, which could cause the homeowner to lose his or her home.
For Texas residents whose properties are being foreclosed, however, the situation doesn’t have to end in a complete loss. Some homeowners, for example, could delay their foreclosure by filing for bankruptcy. Others might want to try to do a “pre-foreclosure sale” of their property. A pre-foreclosure sale happens after the lender begins the foreclosure process, but before the actual foreclosure sale. During this window of time, many homeowners can sell their properties and pay off the remaining part of their home loan.
Not only will a pre-foreclosure sale allow a homeowner to retain the equity he or she has built up in the property, but it may also save the homeowner’s credit score. Foreclosures can be particularly damaging when they appear on a borrower’s credit history.
In some cases of a pre-foreclosure sale, the homeowner cannot sell the property for the full value of the amount still owed on the loan. In these cases, the lender might agree to allow for what is called a short sale. This would permit the homeowner to sell the residence, and whatever amount is received will satisfy the remaining debt owed. In a short pre-foreclosure sale like this, the lender agrees to forgive the remaining balance.
Do you need to sell your home before the date of your foreclosure sale? The pre-foreclosure sale process may be right for you and your needs. However, you need to act as swiftly as possible to increase the chances you’ll find a suitable buyer.