How Does Pre-Foreclosure Differ from Foreclosure
Pre-Foreclosure in Baltimore County MD Explained
The information provided on this page is not legal advice, it is purely informational. Please consult with a legal professional before making any decisions regarding a house that is facing foreclosure.
So, What is Pre-Foreclosure?
Opportunities for Maryland Borrowers Facing Pre-Foreclosure
- If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, lowering your monthly payments. Check with your mortgage broker to see if you can refinance your mortgage.
- You can contact the bank and ask them to permit a short sale. With a short sale, you’ll sell your home for less than it’s currently worth. The bank takes the loss as a tax write-off. Just remember, that with some short sales, you may still be required to pay some of the difference between what is owed and what the house sells for, so this is usually not the best option for most sellers. Additionally, short sales often take several months to complete.
- You may be able to declare bankruptcy. If approved, filing for bankruptcy will allow you to liquidize your current assets to help pay off your current debt and possibly set up a repayment plan for any remaining debts. A bankruptcy will remain on your credit report for several years, significantly lower your credit score and limit your ability to be approved for a loan for 5-7 years, so bankruptcy should only declared as last resort.
- You may be able to sell your property quickly to a Maryland cash home buyer that’s reputable in Baltimore County. We buy foreclosures in Maryland and can buy your home fast. When buying foreclosures, we have also worked with lenders to relieve all or portions of back payments to lessen how much sellers have owed, putting more money back in your pocket.
Lenders are well aware that many people in the US are experiencing financial difficulties, and they actually want to assist borrowers in keeping their homes because it can save them money as well.
If you reach out to the bank, they may be able to offer you ways that will allow you to remain in your home or, at the very least, keep your credit score from taking a serious hit.
A foreclosure can have a significant negative effect on your credit score, often decreasing it by 200-400 points. This can make it very difficult to get a loan of any kind for 5-7 years. So if you receive a Notice of Default from your lender, be sure to take action immediately.
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