When buying a new home, no homeowner imagines they will face a foreclosure, but because of many hardships and economic downturns, an unprecedented number of homeowners in New Jersey are dragged into the distressing process of foreclosure and losing their home. The foreclosure process can be stressful, long and can severely cause damage to the homeowner’s assets, savings and credit
A foreclosure adversely affects the homeowner in many ways and also has a negative effect on the lender and the housing market. The homeowner gets a mark on their credits that make it difficult for them to borrow loans for another home or any other major purchase. Housing market suffers from foreclosure because of decreased home values and banks lose money between the lower sale price they receive when the property is auctioned and the resources they assign to administer the foreclosure process.
There are many options available for New Jersey residents facing closure. These foreclosure prevention options include:
Bankruptcy stalls the foreclosure process and will allow you to repay your lender under a different term while staying at your home. If you have a significant non-mortgage debt that stalls you from paying your mortgage loan, bankruptcy will eliminate these debts. The problem is that bankruptcy does not solve the problem completely. If you can’t afford your home, it will end up in foreclosure within a short time. Bankruptcy can only be declared after every seven years, thus not the best option.
It’s not advisable to declare bankruptcy if you own more than your home is worth because this will not solve the problem. The best thing to do is hire a short sale real estate agent or specialist to help you market your property and negotiate a short sale agreement with a mortgage servicer or a lender. A short sale allows you to avoid foreclosure and keeps a foreclosure off your credit record minimizes the damage on your credit score. The waiting period after a short sale is usually lower than the one required following a foreclosure.
There are many other ways of avoiding foreclosure like Deed-in-lieu of foreclosure (friendly foreclosure), refinance, loan modification, rent the property and many others. As a local real estate specialist, we can help you make sense out of foreclosure by choosing a short sale or rent the property for you. We are here to help.
Get personal assistance from Tae W. Lim. Tae W. Lim is a licensed Real Estate professional.