Buying a home entails commitment, and it goes beyond just signing the check for the first down payment. For some, buying a home means paying out a loan for more than 25 years. As such, the decision to acquire property should never be taken lightly. If you are not cautious – especially when it comes to making timely payments, you may find yourself in the sticky situation of having your home foreclosed. Here is a simple guide for real estate owners to easily understand foreclosures.
What is foreclosure?
Foreclosure refers to the legal means your lender can do to repossess your property. When this is declared, you are expected to vacate the property by the end of the timeline provided.
When is foreclosure enforced?
It is considered as a last resort option that should not be initialized unless all loss mitigation options have already been exhausted.
Why do foreclosures happen?
Foreclosures are declared by the lender should the property owner start to default on payment.
How long do I have before I need to vacate the property?
Once foreclosure has been declared, you will be subjected to both local and provincial law. The lender dictates the start of the eviction proceedings. Usually, the property owner is given a 90-day notice.
Can bankruptcy stop foreclosure?
Bankruptcy can only go as far as delay foreclosure for about three to four months, as the lenders will be automatically ordered to stop collection.
Is it possible to exit the foreclosure process?
Yes. As long as the property has not yet reached the auction phase, you may catch up on payments, renegotiate terms with your employees or even sell the property at a lower market price.
Will foreclosure affect my credit rating?
Foreclosure will definitely affect your credit rating which might give you a harder time in acquiring loans, buying new property, or even acquiring a major credit card in the future.
How long will foreclosure reflect on my credit rating?
Foreclosure usually stays on your credit rating for about seven to ten years.
Is it possible to erase it from my credit rating?
There are credit optimization firms that may assist you in boosting your credit score as well as legally remove foreclosure on your record. It is not 100% guaranteed though.
How long before I can purchase a new property again?
There are various options available to help you in buying another property again. This would depend on your down payment and the bank or government loan agency you are negotiating with.