Have you ever considered the possibility of facing foreclosure and losing your home? It is a common concern that many people share. Pre-foreclosure in Alabama is a real danger for many homeowners because it means that their mortgage lender has sent them a Notice of Default, signaling that they are behind in payments and at risk of losing their home.
Many of us are unaware of the options available to us in this situation, but the good news is with some knowledge and the right resources, it’s possible to mitigate or even prevent foreclosure in Alabama. Read on to learn more about pre-foreclosure and the options available to homeowners.
What is Pre-foreclosure & How Does it Work in Alabama?
The notice in which the mortgagor (borrower) is in default on a mortgage loan and has been notified by the lender or bank to take action or make payment to avoid foreclosure is known as pre-foreclosure. Usually, when a homeowner has not paid their mortgage for 3 to 6 months, the lender will send a “Notice of Default” and start the pre-foreclosure process.
This legal proceeding allows lenders to sell the home at a public auction or for the bank to repossess it if the homeowner can’t pay. The notice has a time of almost 90 to 120 days to cure the loan. It means the homeowner has that amount of time to pay off what is owed or enter into a repayment plan for missed payments.
When a home is in pre-foreclosure, potential buyers can purchase the property at a reduced price. However, the cons of buying a home in pre-foreclosure can be numerous and risky.
The banks usually list pre-foreclosure homes on the Multiple Listing Service or with a local real estate agent for potential buyers to find them. In the real estate market in Alabama, this type of sale is often referred to as a “short sale.” It works by the lender agreeing to accept a price lower than what is owed on the loan.
How Can Borrowers Avoid Pre-Foreclosure in Alabama?
Pre-foreclosure is an intimidating and scary process. It’s important to remember that for most homeowners, preserving their homes is their top priority. Some options are available for borrowers facing pre-foreclosure to help them get back on track with their mortgage payments. The given options are:
Contact the Bank to Permit Alternatives
Borrowers should reach out to the bank as soon as they become aware of their pre-foreclosure status. Most banks in Alabama are willing to work with borrowers to prevent foreclosure. They are open to helping and coming up with alternative payment arrangements and loan modifications.
Reach Out to a Real Estate Professional
A real estate professional in Alabama is an invaluable resource for borrowers in pre-foreclosure. They may have access to resources and options that the borrower may need to be made aware of. It includes strategies to help avoid foreclosures, such as short sales or deeds in lieu of foreclosure. You can even sell your home yourself and make a little profit during pre-foreclosure. Like ours, many home-buying companies in Alabama also purchase homes in pre-foreclosure but you have to confirm the legitimacy of the company before proceeding with it.
Refinance Your Mortgage
This is a great option for borrowers in pre-foreclosure, as it allows them to get a new loan with more favorable terms and lower interest rates. Refinancing can reduce their monthly payments and make them more manageable. Borrowers should work with their lenders to determine if refinancing is an option for them.
Declare Bankruptcy
Filing for bankruptcy can also help to stop pre-foreclosure in its tracks. This may be the only option available to a borrower in some cases. Before filing for bankruptcy, it is essential to understand that it may have lasting effects. It should be a last resort to prevent pre-foreclosure in Alabama.
Diversify Your Income
Borrowers can also look into other ways of diversifying their income to make their mortgage payments in Alabama more manageable. It includes taking on a part-time job or looking into other income-saving methods, such as renting out a room in their home. Moreover, you can also look into government assistance programs to help with mortgage payments.
Note To Remember!
‘Lenders are often willing to cooperate with you if you are going through financial difficulties. By communicating with them honestly, you can discover options that may help you keep your home or preserve your credit rating. If your lender sends you a Notice of Default, acting quickly and responsibly is important.
Failure to do so may result in foreclosure, which could cause a significant drop of between 200-400 points in your credit score. Plus, it also becomes difficult for you to obtain a loan for 5-7 years. It’s best to take action as soon as possible.’
How Can Home Buying Companies in Alabama Help in Pre-Foreclosure?
If you cannot negotiate a resolution with your lender, reach out to home-buying companies in Alabama like us. We purchase homes in pre-foreclosure and make the process seamless for you. The following are the benefits of selling your home to Levi Home Buyers:
Short Notice Sale
We can purchase your home with very short notice and close within 14 days. The evaluation process is simple, and we take the stress out of selling your home. Even if you are facing foreclosure, we offer quick cash to buy your home and help you get out of the situation.
Save Your Credit Rating
We can help protect your credit rating by purchasing your home in pre-foreclosure. It helps you avoid foreclosure and the potential damage it can cause to your credit score. Plus, you don’t have to worry about the hassle of listing your home or having it appraised.
Get Free Guidance
Our team of experienced professionals can provide you with guidance and advice, ensuring that your home is sold quickly and for the best possible price. We can handle all the paperwork and negotiations, so you can rest assured knowing that we are taking care of everything.
Get a Fair Price
We offer a fair market price for your pre-foreclosure home in Alabama. We will evaluate the condition of your home and take into account any repairs that need to be done before closing the deal. Obviously, a pre-foreclosure home is not an ideal situation, but we do our best to make it as least painful as possible.
No Realtor Fees
We do not charge any fees, such as realtor commissions or closing costs. The perk of selling your home in Alabama to us is avoiding all the traditional steps involved in selling a home and saving thousands. So, if you are facing pre-foreclosure for your home, contact a reliable home-buying company.
Concluding Remarks
Pre-foreclosure is such a stressful situation for anyone to go through, but no worries. If your home is in pre-foreclosure, there are possible ways to resolve the situation. By taking a proactive approach and working with your lender, you can avoid the long-term damage of a foreclosure.
You can also contact a trustworthy company specializing in buying homes in pre-foreclosure if you want to avoid the hassle. I hope this information helps you understand the nuances of pre-foreclosure in Alabama and how to avoid it. Feel free to contact us with any questions or if you need more information.