Top Three Ways to Avoid Foreclosure in Phoenix

avoid foreclosure

Every homeowner wants to avoid one thing: foreclosure. While there was a drop in foreclosures in 2020, the rates are quickly rising again. The number of U.S. properties with foreclosure filings in July 2021 was 12,483 according to ATTOM Data Solutions. This is up roughly 40% from July 2020.

Sometimes, things happen in life that are outside of your control, though. This isn’t the end of the world – there are still a few things you can do to help you avoid foreclosure and to either keep your home, or sell and find a new, more affordable place to live. 

Today, Property Spot is going to go over a few of those solutions. 

What is Foreclosure? 

Basically, a foreclosure notice of default is a document that has to be filed by a lender to start the process of foreclosure. We have an entire blog that outlines the foreclosure process in Arizona, so if that affects you, you can read about it here

First and foremost, the foreclosure notice of default must be sent to anyone who has an interest in the property, such as lenders and contractors, and the notice of default must be published in a newspaper and physically posted on the property itself. If all of this pertains to you, here are a few things you can do. 

Reinstate or Modify Your Loan

If you have enough cash on hand, you can reinstate your loan by making up all the missed payments, including principal and interest, plus fees and expenses. State law often gives homeowners a specific amount of time to reinstate.

Even if state law doesn’t give you the right to reinstate, many mortgages and deeds of trust provide this right as part of the agreement. To find out how long you have to reinstate, call your loan servicer.

Loan Modification 

If you can’t reinstate your mortgage, try for a loan modification. 

Loan modifications are commonly used when a homeowner does not have the ability to pay their current mortgage amount now or in the foreseeable future. This can be for a variety of reasons such as a job layoff, or an injury.

A loan modification includes reduced interest rates, extension of the loan repayment period, modification from a variable rate to a fixed rate mortgage, or re-amortization of the loan where the missed payments are applied at the end of the loan term.

Enter Into a Repayment Plan

Some lenders will agree to a repayment plan, especially if you aren’t that far behind on your payments. A repayment plan allows you to arrange to make up missed payments over time and stay current on your ongoing payments in the meantime. For the plan to work, your income will have to cover both current and overdue amounts. Typically, a repayment plan lasts three, six, or nine months, depending on the situation.

The repayment plan takes the amount of the mortgage payments missed, divides it up over a specific period of time, and adds it to the current mortgage amount. 

Sell Your Home

One of the easiest ways to avoid foreclosure is to sell your home. You can choose a reputable cash for home company to get the process done quickly and easily. This option also helps protect your credit score, as well as ensures you don’t need to spend more money than you have on loan reinstatements, modifications, or costly renovations and repairs. It is a simple method that puts some money directly into your pocket to help you get back on your feet, faster. 

How Long Does It Take To Sell A Home?

In 2020, homes spent an average of just 25 days on the market before going under contract. After an offer is accepted, home sales typically require an additional 30- to 45-day closing period before they are officially sold. Therefore, the average time it takes to sell a house the traditional way (through a real estate agent or listing it) is 55-70 days. 

It does vary by state. The average time it takes to sell a house in Arizona in 2021 is 72 days — 37 days to get an offer and 35 days to close.

Under three months is fast, but it can be an eternity depending on your situation. If you need something faster, give us a call at Property Spot. We can give you a fair cash offer in 24 hours. If you accept it, there is minimal paperwork for you to fill out, and you get to pick the closing date, thus ensuring the process is as expedited as you need it to be. 

You can learn all about selling your home through Property Spot here, or you can give them a call at 480-400-7792. Their agents will be happy to help you and can give you an offer quickly to help you avoid foreclosure. 

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