Local NJ homeowners who are facing a financial challenge may find themselves in foreclosure. Foreclosure is when the mortgage loan does not 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 about it. In this blog post, you will read about a few foreclosure prevention measures in New Jersey that you can take to keep your home from foreclosure.
Foreclosure prevention measures in Bordentown NJ
These foreclosure prevention measures might not all work in your situation but we are telling you about them so you can make the decision for yourself:
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 banks wanted in the first place so they would be happy to let you stay in your home and they get their money back. Admittedly, this is not always possible, which is perhaps the reason that you are in foreclosure in the first place.
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. Perhaps your payments get spread out so they are lower each month, for example. Just make sure that the deal works for you — you do not want to just repeat the process.
3. Do a short sale. A short sale is a strategic option when you sell the property and use the proceeds of the sale to pay down or pay off your outstanding amount with the bank. While this may involve the emotional challenge of leaving your home, it can be a proactive step to prevent the foreclosure process from reaching its conclusion. Selling the property before the foreclosure is finalized often allows you to retain more control over the sale, potentially securing a better selling price compared to the distressed value in a foreclosure scenario. This also 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 voluntarily surrender the deed to your house to the bank, and, in return, the bank agrees not to proceed with a formal foreclosure. This option can provide a more amicable resolution compared to a contentious foreclosure process. 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. While deed-in-lieu-of-foreclosure may impact your credit, this option is often viewed more favorably than a foreclosure, and it demonstrates a proactive effort to address the situation.
5. File for bankruptcy. In some ways, bankruptcy is far more dramatic than a foreclosure because it impacts your whole life, including but not limited to your credit, assets, and financial standing. However, once you file for bankruptcy, the foreclosure process has to stop so it is still one of the foreclosure prevention measures. This pause provides a reprieve, allowing you the opportunity to reassess your financial situation, explore potential solutions, and work towards a more stable future. It is essential to approach bankruptcy with careful consideration, weighing the long-term consequences against the immediate relief it provides. As such, it should be pursued only after thorough evaluation and consultation with professionals who can guide you through the complexities of the legal and financial implications.
If you are not sure which one to do, consider this: If you can afford payments and you want to stay in the house then a foreclosure workout arrangement (#2) is probably your best 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.