Local Arizona homeowners who are facing a financial challenge may find themselves in foreclosure.
Foreclosure is when the mortgage loan doesn’t get paid back and the bank begins the process to take ownership of the property to recoup its losses.
If you find yourself entering the foreclosure process, you might wonder if there is anything you can do to avoid it.
In this blog post, you’ll read about a few foreclosure prevention measures in Phoenix that you can take to keep your home from foreclosure.
Foreclosure prevention measures in Phoenix Arizona
These foreclosure prevention measures may not all work in your particular situation but we want to ensure that you’re fully informed:
1. Pay off your mortgage / sell your property. The quickest and easiest way to end the foreclosure process is to pay off your mortgage. After all, this is all the bank wants in the first place so they would be happy to let you stay in your home if they get their money back. Admittedly, this is not always possible, which is perhaps the reason that you’re facing foreclosure.
2. Work out a deal with your bank. Sometimes you can work out a deal with your bank where you sit down with a mortgage or foreclosure specialist and talk to them about changing the structure of your mortgage. As an example, perhaps your payments get spread out so they are lower each month. Just make sure that the deal works for you — you don’t want to just repeat the process.
3. Do a short sale. A short sale is when you sell the property and use the proceeds of the sale to pay down or pay off your outstanding amount with the bank. This keeps a foreclosure from impacting your credit score and it gets the bank off your back!
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. In some ways, a bankruptcy is far more dramatic than a foreclosure because it impacts your whole life. However, once you file for bankruptcy, the foreclosure process has to stop so it’s still a foreclosure prevention measure.
If you’re not sure which option is best for you, consider this: If you can afford the payments and you want to stay in your home, then working out an arrangement with your bank (#2) is likely your best foreclosure prevention 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.
Considering selling your Arizona house?
We buy houses in AZ for cash and would be happy to see if we can help you during your short sale. Contact us by filling out the form on this page and we’ll contact you shortly.