Expert Foreclosure Help

Pre Foreclosure Loans Are Not Perfect However They Can Help

Pre foreclosure loans are useful for stopping foreclosure and for home selling. However they are also an additional layer of debt. If you have the will to be responsible in their use, a pre foreclosure loan can get you out of a tight spot and help you save your credit rating.

But be warned up front, if they are used without any expectation of increased income later then you will most likely find yourself worse off. Pre foreclosure loans are only useful as long as the pre foreclosure period does not end. Your lender will only give you as long as the pre foreclosure period to make your mortgage payments before they will foreclose on your property. Pre foreclosure periods vary from state to state so you should check your local laws for details.

If you say to yourself “How lucky I am if I can just pay this medical bill” and you are also having trouble paying your mortgage, then getting such a loan might be just right for you. Needing cash to pay for damage to your home caused by flooding, wind, hail or fire not covered by insurance can also be a perfect situation for such a loan.

If your should sell your home because you have a significant loss of income then a pre foreclosure loan can buy you the time you need to make the sale. Typically a real estate investor will offer you a loan at 15% to 20% discount off the value of your property which you will use to pay off your mortgage and then turn around and sell the house to the investor. If you owe more than 80% of your property value, then it is certainly preferable to lose a little equity on the sale of your home than to default on your mortgage completely.

Investors will often contact you directly if you have missed a few payments during a pre foreclosure period because foreclosures are public information. If they people who invest in real estate consider your property to be a good investment then you have a better chance of negotiating a loan with them. Not only will this arrangement get you out of a tight spot, but it can keep your credit rating intact and leave some money in your pocket to boot!

If you are having trouble finding an investor that will provide you with a loan, consider hiring a real estate agent to find an investor for you. The investor will then deal with the real estate agent directly, and you will only need to pay the real estate agent their commission and not have to worry about any of the details.

Check out Avoiding Foreclosure for more information.

Tom Straub is the owner of Tom Straub Publishing and an EzineArticles Expert Author that has written articles on a variety of subjects since 2006.