Mortgage debt can be crushing. In fact, this type of debt is the largest debt in the United States, with the average American household’s mortgage debt coming in at $189,586. The total amount of mortgage debt owed in the U.S. is $9.44 trillion. The reality is that many people cannot pay off their mortgages the way that they initially expected they would be able to do when taking out their loans. Job changes, medical bills, and catastrophic life events can make it impossible for people to spend pay off their mortgages.
Typically, financial institutions will send notices of foreclosure after roughly four mortgage payments are missed. However, different financial institutions may approach foreclosure differently depending on their own individual standards. A foreclosure is always devastating, but the real issue behind a foreclosure is that it can affect your credit score for years. This will make it difficult for you to even rent another home, let alone buy a new home. Therefore, you should do whatever is necessary to avoid foreclosure. For most people, this is going to involve deciding to sell your house fast for cash. Below are the steps you should walk through when trying to take this option instead of facing foreclosure.
1. Contact Your Lender
Typically, financial institutions will put a house up for auction to recoup their own financial losses when foreclosing on a house. If you’d rather sell your house fast for cash in order to avoid foreclosure, you need to contact your lender immediately. Not all financial institutions, unfortunately, will allow you to sell a house for cash in order to avoid foreclosure. But generally speaking, many will because this option benefits both of you.
You need to have your pitch ready for your lender and be prepared to negotiate and make your case. Typically, they will agree to a limited amount of time during which you can sell your house. This is why you need to sell your house as quickly as possible. Therefore, many people who choose to sell a house fast work with cash buyers.
2. Select a Buyer
One of the main reasons why you should work with cash buyers when you want to sell your house fast for cash is that cash buyers don’t need to wait for a loan. They have cash ready and are able to pay in full. Often, you will receive less money when selling a house for cash as opposed to selling a house on the traditional market; but you benefit in that you don’t have to wait for a home loan to be approved, and you’ll receive your payment in full.
Additionally, cash home buyers usually will not require renovations or repairs on the home. This is because these buyers often renovate houses themselves, essentially flipping homes and selling them for a profit. When selecting a cash buyer for your house, you should work with someone reputable. You may even be able to get a recommendation from your lender. Don’t choose an individual buyer; these buyers are often less trustworthy and more likely to fall through.
3. Choose a Closing Date
Oftentimes, companies that offer cash for homes will allow you to select a closing date, sometimes from a selection of different dates. This actually gives you a lot of power. You can ensure that you’re able to have the sale closed within the time frame that your lender specified, and ensure that you have time to pay off your debts.
When choosing a closing date, make sure that you will be able to move out efficiently. Have a place ready to live in, whether you’re staying temporarily in a hotel or moving directly into a new residence.
4. Pay Off Your Debts
Once you have decided to sell your house fast for cash, you can begin focusing on how you’ll pay off your debts! After receiving your payment, settle your debts with your lender to the best of your ability.
You may not be able to pay off all your debts at once. But being able to sell your home and at least begin paying off your debts will give you more freedom for your future, and prevent you from suffering the consequences of foreclosure.