Homeowners facing foreclosure often ask a common question: can I sell my home before foreclosure? As with all legal questions, the answer depends.
A lender brings a foreclosure to recoup the money owned on the underlining mortgage loan. Paying off this debt is the simplest way to avoid foreclosure. If a homeowner can sell the home and satisfy the loan, foreclosure is avoided.
This, however, is dependent on the home selling for equal to or greater than the mortgage loan. If the home is worth less than the owed money, the home is upside down. To sell the property, the borrower then needs the permission of the lender.
If the homeowner has equity in the property a sale of the home to avoid foreclosure is a possibility. In such a case, the homeowner simply sells the home, pays off the loan, and pockets the difference from the sale. In Morgan County home sales are sky rocketing! Its a perfect time to cash out of your home if you’re struggling.
Take A Deep Breath
What is the worst thing that a homeowner with equity in their home can do? Let the home get foreclosed. In a foreclosure sale, the homeowner collects the difference in money between the foreclosure sale and the amount owed on the loan. For example, if the home sells for $500,000 and the homeowner owed $400,000 on the loan, the homeowner is entitled to the surplus: $100,000 (minus legal fees and other foreclosure costs). If a homeowner has no options for saving the home, and has equity in the property, they should give serious thought towards selling the home and maximize the amount they can get from the sale.
When considering whether to sell a home to avoid foreclosure, timing is of critical importance. Contact your lender and a trusted Realtor to find out about your options. Gateway Realty LLC would be happy to help you get out of the foreclosure process by selling your home for top dollar quickly.