“I’m behind in payments…will I be giving my house back to the bank in Augusta?”
Nobody wants to face the prospect of losing their home, but sometimes, unforeseen financial hardships can make it difficult to keep up with essential financial commitments.
If things escalate beyond control, you may find yourself in a position where returning your home to the bank in Augusta, GA becomes inevitable, leaving you temporarily without a place to live. On top of that, the fallout can extend far beyond just losing your home, leading to serious, long-lasting consequences, such as a significant decline in your credit score and making it more challenging to secure housing in the future.
Clearly, this is an outcome no one desires. It’s far from ideal. However, the good news is that there are proactive steps you can take right now to protect yourself, regain control of your finances, and put yourself back on the path to financial stability.
An Overview of the Foreclosure Process
The foreclosure process can differ depending on the state you live in and the specifics of your mortgage agreement. However, there are some general steps that most homeowners will go through when faced with the possibility of foreclosure.
Typically, when you miss a few mortgage payments, your lender will begin reaching out with notifications, followed by formal warnings. If you continue to miss payments over an extended period, the lender may take the next step and initiate the process of putting your home up for public auction.
How long you can stay in your home after it is sold at auction largely depends on the foreclosure laws in your state. In most cases, though, no matter where you are, you will eventually need to find a new place to live once the home has been auctioned off.
That said, you don’t have to feel trapped or powerless during this time. There are options available that can help you avoid the worst consequences of foreclosure.
Why You Should Act Early
If you let the foreclosure process run its course, it can have serious, long-lasting effects on your credit score, making it more difficult for you to secure housing or loans in the future. Fortunately, you have choices that can help protect your financial future and lessen the blow to your credit.
One Option: A “Deed in Lieu of Foreclosure”
One way to prevent foreclosure from affecting your credit is by negotiating with your lender for a “deed in lieu of foreclosure” agreement. This arrangement involves you voluntarily transferring ownership of the property back to the lender in exchange for them waiving the foreclosure process. This can save both you and the lender money—lenders would avoid the significant costs associated with a foreclosure, and you would avoid having a foreclosure listed on your credit report.
Another Option: Selling Your Home Before It Goes to Auction
Another option is to sell your home before it’s put up for auction. This could be a viable solution to help you pay off your loan and avoid the damaging effects of foreclosure. If you sell your home and pay off the mortgage in full, there will be no further penalties, and your credit score won’t take a hit. However, if the sale price doesn’t cover the full loan balance, you’ll need to cover the remaining difference.
For example, let’s say you owe $100,000 on your mortgage, but your home sells for $90,000. In this case, you would use the $90,000 from the sale and then provide an additional $10,000 to pay off the full loan balance. This would allow you to settle the debt and avoid foreclosure, but it requires having the funds to cover the shortfall.
It’s also worth noting that, in some cases, you may be able to negotiate a deed in lieu of foreclosure deal where the lender agrees not to pursue the remaining balance if you provide the deed to the house.
How We Can Help
At HBI Home Solutions, we are professional real estate investors with experience in helping homeowners in challenging financial situations. If you are struggling with your mortgage, contact us today at (706) 389-5419 to see what we can offer for your home—even if it needs repairs. We specialize in providing solutions that can help you move forward with your life and regain financial stability.
I want to avoid giving my house back to the bank in Augusta!
Why do some people opt to sell their home instead of going through foreclosure? (Especially since they may no longer be living in the house.)
While losing a home can be emotionally challenging, the impact on your finances and credit is much less severe if you sell the home rather than allowing it to go through foreclosure. In fact, foreclosure can cause your credit score to drop by as much as 100 to 150 points. So, even though selling your home may be a difficult short-term decision, it’s still a better option than enduring the long-term consequences of letting the bank take it back.