With the dramatic decrease in the housing and real estate market properties all over the country are taking a direct hit. In many cases people are looking for options to refinance pre-foreclosure – Virginia and all over the United States as well as in Canada and even in countries outside of North America. Since there are several different options for property refinance pre-foreclosure, Virginia options will be very similar to options in other states. Knowing your options and what you can reasonably consider will help in making the right decision.
The last option for any homeowner is to allow their property to go into foreclosure. Not only does this ruin your your credit score, but it can also impact on all areas of your life where your credit score is used. This can include your insurance premiums, your ability to rent or own property as well as even in some employment situations. In addition if you default on a loan and your property goes into foreclosure, it may be very difficult to ever find a lender that will work with you on a home purchase for a workable interest rate for many years into the future. Refinance pre foreclosure, Virginia State or elsewhere, is something that needs to be started as soon as possible to prevent foreclosure.
There are actually several options that many owners may have for going through the process to refinance pre-foreclosure. Virginia homeowners may find that they are really struggling to make payments, or may have already missed payments or only provided partial payments. As soon as this happens, contact your lender and try to work out a reduced payment or a partial claim loan, which will allow you to borrow funds at no interest through the Department of Housing and Urban Development. The lender is then satisfied and you have a no-interest loan that allows you to stay in your home.
As another option to refinance pre-foreclosure, Virginia lenders may also be willing to consider a full loan refinance if the homeowner has built up equity in the home or the value of the property has dramatically increased since the purchase. Even in this declining home market there are some areas of property value increase and some types of home are still doing very well on the market. In these cases the equity in the home can be converted into a line of credit or a home equity loan, helping with the refinancing and loan payment.
Home owners with no equity or those that are upside down in their home, where the market value of the property is less than the mortgage amount, have very few refinancing options. Going directly to the lender and attempting to negotiate a decreased loan payment or extending the loan may be an option in some cases, but consider getting legal representation when entering into these negotiations to avoid paying huge refinancing costs and other fees.
Many individuals don't realize that there are many steps involved in a foreclosure procedure, some which are designed to allow the homeowner to correct the defaulted payments and retain their home. Pre-foreclosure is one such step. This preliminary step to a full foreclosure is a set period of time, usually between three and six months, where the home or property missed payments can be made up, preventing the property from going into full foreclosure. The bank or lender must notify the homeowner in the pre foreclosure stage and will typically work with the owner to try to come to some type of payment plan that will satisfy the lender and still be manageable for the owner.
While it may seem that lenders are unwilling to work with homeowners that have defaulted on payments, in reality starting a foreclosure process costs the lender money, plus they rarely get their full investment or loan amount back. In difficult economic times they may end up not being able to sell the house for a reasonable market value, so may take an additional loss on that end as well as on the foreclosure. During the pre-foreclosure period the bank or lender is often highly motivated to work with the homeowner, even if it means refinancing options or spreading the payments out over a much longer period of time. Typically working with the lender earlier in the pre foreclosure period is better rather than waiting until the end of the grace period.
The exact length of time for a pre-foreclosure period is determined by state regulations, so checking with your real estate agent, real estate attorney or lending institution can help you know exactly how long you have to negotiate a settlement before the full foreclosure can be started. During the pre foreclosure period the lender cannot start foreclosure action, so it is critical to know exactly how much time you have.
During the pre-foreclosure time frame the lender basically does not have a legal standing or legal right to attempt to force the owner out or off of the property. Once the pre-foreclosure period is over and the lender and the homeowner have not been able to reach a settlement option to pay the deficit amount on the mortgage, the lender is within their rights to proceed with foreclosing and taking over the property. If the homeowner and the lender are able to work out a repayment agreement, the foreclosure is stopped and the agreed upon repayment plan, refinancing or extension of the mortgage is put into place. A property can go through this process more than once, however typically lenders become less willing to work with the homeowner when this type of default becomes a pattern or happens more than once.
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