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Hard Money Foreclosure Loan Saves Your Home

Losing your job can make it very difficult to pay all of your bills on time. There are many people who find themselves drowning in debt after losing their job with seemingly no way out. One out of every 2411 homes in the United States went into foreclosure in May of 2019. If you have worked to pay off as much of your debt as you can and still find your home in foreclosure, a hard money loan may be right for you. Use the guide that follows to find out how you can use a hard money loan to save your home.

Hard Money Loans Can Bridge the Gap

A hard money loan is designed to be a temporary loan. Most hard money loans are repaid in less than two years. When you are approved for the loan, you can use the money to help pay off the debt that you own on your house so that you can stop the foreclosure process. Making your payments each month will raise your credit score. This allows you to refinance your home and pay off the debt you owe to the hard money loan.

The Interest Can Be Intimidating

Some people are intimidated by hard money loans because they have such a high-interest rate. It’s important to realize that if the loan can keep you afloat so that you don’t have to foreclose on your house, the rates are worth paying. You’ll only have to pay them for a short period of time. The lenders need to make money off of the loan and charging an interest rate is a way to make it. You are viewed as a risk to lenders and thus have to pay a higher interest rate than someone who isn’t.

You Don’t Need to Provide a Down Payment

The great thing about a hard money loan is that you don’t need to provide a down payment in order to get it. You can simply use the collateral from your home as the down payment. A third-party appraisal company will appraise the house. The appraisal allows the hard money lender to have an idea of what the value of the property is on the open market. The loan amount they offer to you will be based off of this evaluation.

Your Foreclosure Won’t Affect Your Ability to Get A Hard Money Loan

Traditional lenders will not offer someone in foreclosure a loan. This is because they are such a risk. They assume that the person will not repay their debt on time or possible not repay it at all. The hard money lenders don’t take your credit history into account. The fact that you have a foreclosure on your record doesn’t matter to them. This is because they use your home as collateral for the loan. If you fail to pay off the loan, they can take possession of it and sell it to pay off the debt you owe.

When a home goes into foreclosure, the lender can seize possession of it to sell it to pay off a debt, as well. This means that getting a hard money loan isn’t really a risk for you. It provides you with the extra time to get caught up financially without assuming any additional risks.

A Hard Money Loan Could Actually Save Your Credit

Before your home goes into foreclosure, you are notified by the lender who holds your mortgage. According to USA.gov, you should ” As soon as you realize that you are going to have trouble making your mortgage payments, contact your lender and tell them about your financial difficulties. ” You need to see if you can negotiate different terms of payment with them. If you cannot, talk to a hard money lender right away. You can get the money to pay off the loan for your home before it even goes into foreclosure. This will make it even easier to get your financial life back on track.

Having your house go into foreclosure can be very stressful. Taking the time to avoid it at all costs can make your life easier now and in the future. Talk to a hard money lender as soon as possible if you feel you’re not going to be able to pay your mortgage in the near future to find out what your options are.

References:

https://www.realtytrac.com/statsandtrends/foreclosuretrends/

https://www.usa.gov/foreclosure