Borrowers who fall behind on their mortgage payments typically go through a number of procedures before facing foreclosure. Foreclosure occurs when you break your repayment agreement with your lender and fail to negotiate alternative repayment arrangements, such as a loan modification.
The promissory note you signed at closing as a condition of taking out a mortgage contains details on the repayment agreements. These agreements may differ depending on the lender and the jurisdiction. Refer to your mortgage agreement for specific rules that govern your mortgage.
The first thing you should do before missing a mortgage payment or falling behind on your installments is to get organized. Set up a file for your home’s records and place important documents in it. Include copies of your loan documentation, such as the mortgage (or deed of trust) and the promissory note.
After gathering your documents, spend some time reading them thoroughly to understand what would happen if you don’t make your payments. Knowing all of these crucial details can help you a lot. Important information will be included in the mortgage (or deed of trust) and the promissory note, such as:
You should compile and organize your financial information in addition to the loan documentation. Gather your most recent pay stubs or, if self-employed, a profit and loss statement, bank statements, federal tax return, and supporting documents for any other income you generate, such as social security, rental income, and alimony. You should also calculate your overall monthly income and expenses. Try to reduce your expenditure in order to make your mortgage payments. Any superfluous spending should be closely monitored.
Don’t put off seeking assistance until the last minute. If you miss a payment or fear you will miss one, contact your servicer right away to determine if you qualify for a foreclosure alternative. Remember that they do not want the house and will assist you with a new repayment plan and other solutions during difficult financial times.
Typically, you are not required to leave until the foreclosure process is completed, which can take several months or up to a year or more. However, once your house is sold, you must vacate the premises. You may have some time following the selling date to live in the home, although this varies by state. If you continue to occupy the premises after your legal rights have expired, the homeowner or lender will initiate a formal eviction procedure.
According to FICO, foreclosure is a very negative credit event that can reduce your credit score by 100 points or more. Furthermore, it remains on your credit report for seven years. Your credit score will be negatively impacted prior to the foreclosure process because missed payments are at the top of the list of all adverse events.
The fact that you may lose your house is one of the most distressing events you can have. However, you don’t have to face it alone. Contact Alpha mortgages House Corporation in Surrey BC to get free, expert assistance in avoiding foreclosure. Our experts can guide you on the best financial solutions available.
Feel free to contact us at 6045019837