“I am behind in payments…will I be giving my house back to the bank in New Jersey?”
Nobody wants to lose their home. But sometimes financial circumstances turn against you and those financial commitments become simply too much to manage.
If your situation progresses too far, you may be forced into the unfortunate situation of having to give your house back to the bank in New Jersey, leaving you temporarily without a place to stay. In addition, there may be long-term consequences, including a dramatic and long-lasting impact to your credit (and your ability to get a house in the future).
No one wants that. That is not an ideal outcome. Fortunately, there is a strategy you can take today to help you proactively protect yourself and get back on track to financial solvency. In this article we will help you take the action you needed today, so you would not find yourself asking – “Will I be giving my house back to the bank in New Jersey?“
Here is a brief overview of the foreclosure process
The foreclosure process can vary depending on location and the type of mortgage you have.
Usually, if you miss a few mortgage payments, your loan company will start sending you notifications and then warnings. These notifications typically include information about the amount owed, the delinquency, and the steps you can take to remedy the situation.
Over time, if you fail to pay back the mortgage payments you missed, the loan company may put your home up for public auction. This is a last resort to recoup the outstanding debt.
How long you can stay in your house after it is sold in auction depends on the state where you live. In New Jersey, for example, there are specific rules and timelines governing the eviction process after a foreclosure auction. The exact eviction timeline can vary widely, so it is crucial to understand your rights and obligations under your state’s foreclosure laws. You may have a grace period to vacate the property, but eventually, you will need to find a new place to stay.
Fortunately, you have options!
If you wait until your home is foreclosed, it can have a devastating effect on your credit rating, making it essential to explore alternative solutions. One option to protect yourself is to work out an arrangement with the loan company called a “deed in lieu of foreclosure”.
A “deed in lieu of foreclosure” is when you voluntarily hand over ownership of the house to the loan company so that they save the money they would spend on foreclosure proceedings, which can be significant. And you get to avoid having a foreclosure listed on your credit rating, which can have long-lasting negative effects.
You can also avoid foreclosure by selling your house before it is lost at the auction. If your loan is paid in full then there will be no more penalties against you, and your credit rating will be spared. (However, if your loan is not paid in full you will need to make up the shortfall).
Here is an example: Let us say you owed $100,000 on your home and you sold your home to us for $90,000. You would give that money to the loan company, along with $10,000 to make up the short-fall, and your loan would be paid off. If you contact a real estate attorney, you may be able to negotiate a deed in lieu of foreclosure deal in which the loan company agrees not to go after the difference in exchange for the deed to the house, providing you with a more favorable resolution.
At Beacon Realty Investments, we are professional real estate investors, and we specialize in helping homeowners facing financial difficulties. Contact us today at 609-531-4990 to find out what we can offer you for your house — even if it needs repairs. We can discuss various solutions to help you avoid foreclosure and its detrimental impact on your credit.
I want to avoid giving my house back to the bank in New Jersey!
Why do people choose to sell their home instead of going through foreclosure? (After all, they still do not live in their home anymore.)
Well, losing a home can be difficult but the impact on your financial situation and your credit is considerably less than if you simply wait out the foreclosure process. In fact, going through foreclosure could impact your credit score by as much as 100 to 150 points. So the short-term challenge of selling your house is still a better choice than the long-term pain of giving your house back to the bank.