Do you currently own a home? The fear of your home being foreclosed on can make you scared that the bank is going to take your home and destroy your credit score so that you won’t be able to purchase another one.
This process is a hard one and happens when an individual is not able to make payments and the loan officer assumes ownership and attempts to sell the home. There are only a few homeowners who know how the process works. Did you know that many things you think you have knowledge of are actually a myth? Here some myths about foreclosure below.
Myth Number 1: Your bank would like to purchase your home
Your bank that you have the loan attached to is legally obligated to get the cash that you owe for the home. It is a last resort when the bank takes away your home from you. Your bank would like to do anything outside of foreclosure because they would rather collect on your mortgage and not own the home. They take a loss when they need to foreclose on your home.
Myth Number 2: It is impossible to refinance with another loan officer
It is possible to refinance and use a new mortgage to pay for the mortgage you currently have to prevent the foreclosure from going through. The mortgage amount is typically at an increased rate and you should research the good and bad things about it. To get this new loan, you have to have a stable job and equity on the home.
Myth Number 3: You can’t stop a foreclosure when it begins
Did you know that you can attempt to prevent the foreclosure from going through before it up for auction? This is the last portion of the process. You can call the trustee who handles the process and pay back all of your missed payments before it. You will need to collaborate with your loan officer to do this.
Myth Number 4: You need to get out of your home right away
When you miss a few loan payments or hear from your loan officer that they are concerned, you don’t need to think that you are getting kicked out right away. When you own a home, you are legally allowed to live in your house up to the point that the foreclosure process ends. Loan officers will let you stay in the home longer sometimes.
Myth Number 5: Foreclosure will ruin your credit for life
The foreclosure will live on your credit report and affect your score for at least seven years. But you should be able to borrow money again once you have proved that you are creditworthy. You could reestablish good credit two to four years after the foreclosure by regularly paying off a credit card or a high interest car loan.
Do you have a question about foreclosure myths? Click here to contact Lending Corner today!
Courtesy of Cuselleration