If you’ve defaulted on your mortgage and don’t foresee an improvement in your financial situation, you may be able to avoid foreclosure by selling your house. But before you decide to sell, you should understand your options first.
Here’s what you should know about selling your North Carolina home if you’re behind on your mortgage payments.
Figure Out if You’re Underwater on Your Mortgage
First and foremost, you’ll want to determine the fair market value of your home in as-is condition. Next, you’ll need to verify whether you currently owe more on your house than it’s presently worth.
If your home is worth more than the amount you still owe on your mortgage, you can sell the house and use your profits to pay back the remaining balance of the loan. But if your home is worth less than what you currently owe on the mortgage, conducting something called a short sale will likely be in your best interest.
Hire a Realtor
When you’re facing foreclosure, time is of the essence, so if you want to take the traditional home-selling route, you’ll need to find a good realtor who has a track record of quick sales. Generally, lenders begin the foreclosure process when a mortgage loan is more than 120 days delinquent, so if you’re already behind even a single payment, you don’t have much time left.
Keep in mind that on average, it takes about two to three months to sell a home on the open market and close the deal. But it can and does take longer than that in many cases. If you don’t want to stress yourself out worrying about whether your property will sell in time, working with a realtor may not be for you. But don’t worry — you still have options.
Sell Your House for Cash
When you need to sell as quickly as possible, selling your house to a cash home buyer may be your best option. These types of buyers are real estate investors who have the capital on hand to purchase homes outright for cash. They can buy your as-is house, regardless of its condition, and will make you a fair cash offer that reflects the market value of your home.
In most cases, cash home buyers can close a deal within 10 days or less and can work with you on a move-out timeline that accommodates your needs. If you want to get out from under your mortgage as fast as possible, working with an investor is likely the safest way to go.
Talk to Your Lender About a Short Sale
If your home is worth less than the remaining balance of your mortgage, you’ll still owe on the mortgage if you sell the traditional way. That’s why banks offer something called a short sale for distressed homeowners, which allows you to sell your house for less than what you still owe on the mortgage. Essentially, the bank agrees to a bid that’s lower than the remaining balance of your mortgage and lets you come up “short” on repaying the loan, so you can avoid going into foreclosure.
To take this route, you’ll need to get approval from your lender, fill out the required paperwork, and submit a hardship letter explaining why you’re unable to continue making payments. If the bank approves the short sale, all of the proceeds from the sale will go directly to the bank.
Depending on the circumstances, the bank may forgive the remaining loan balance or may issue something called a deficiency judgment, which will require you to repay some or all of the difference. This type of sale will leave a mark on your credit, too, but if you’re seriously upside down on your loan, it may be your only viable option.
Sell Your House for Cash to Avoid Foreclosure
If you’re behind on your mortgage and want to sell to avoid foreclosure, don’t hesitate to reach out to our team at We Buy Houses Winston-Salem to get a cash offer for your home. We can buy your house no matter what kind of condition it’s in and can close the sale in as few as 10 days.