So you want to know can I sell my house while in forbearance?
It can be tough to sell a house while in forbearance, but it is possible.
If you would like to sell your home while still making payments each month, there are a few things that you should know about selling the property during this time.
Forbearance is a period where the homeowner makes an agreement with the lender to pay back the amount thats behind over a extended period of time and continues living in the home without fear of foreclosure.
However, after so many months, you will have to make up all those missed payments if you want to avoid foreclosure.
In some cases, homeowners may be able to sell their homes before they begin repaying these back payments – which means that they could potentially save themselves from foreclosure by selling now!
We will explain everything below so that you fully understand the process and how we can help make this possible for you. Keep reading!
What Are My Other Option Besides Selling My Home In A Forbearance
If for some reason you are not ready to sell your home you do have another option you can try. This option would be to do a loan modification.
If you are unfamiliar with how this process works feel free to reach out to me so that I can help you get through the process.
The loan modification works where instead of you having to pay the lump sum that is due and payable at the end of the forbearance your loan is modified.
Usually, when your loan is modified they will consider modifying the terms and interest rate of the loan.
The amount that you owe will be put to the end of the note and you will be given a fresh start.
One of the things that you have to consider is you have to qualify for the loan modification.
If for some reason they say you don’t qualify and you don’t have the amount needed to catch up then you will need to sell the home.
What Is Forbearance And How Does It Affect Your Ability To Sell Your House
Forbearance is defined as the voluntary suspension or reduction of payments on a debt.
This can be done for personal reasons, such as if you are experiencing an economic slowdown or for financial emergencies.
What you want to remember is that although these payments were suspended the amount is still due and payable to your mortgage company.
So how does this affect your ability to sell the home? The answer to the question is it doesn’t affect your ability to sell.
You can sell at any time while you are still in a forbearance agreement. What you would have to do is make sure you are in clear communication with your lender.
This is the key thing that you want to do. You want to be clear with your lender on what you intend to do.
You will be dealing with the loss mitigation department at your mortgage company.
What Are The Benefits Of Selling My Home While I Am Still In Forbearance
If you have been denied the loan modification or a refinance for one reason or another, then selling your home while still in forbearance might be the best solution.
You can use the money from this sale to pay off the mortgage debt and then if you have equity in your home, you will be able to cover some of your other living expenses and other debts until things calm down with regards to getting back on financial track.
I know that may not sound very appealing but hear me out! When selling your home before going into bankruptcy there’s no need to go through Chapter 13 reorganization because you are clearing out the mortgage debt.
You do that only if you feel you have other debts that you are trying to manage. Make sure you talk to an Attorney who understands Chapter 13 and Chapter 7 laws.
Another benefit of selling the home and getting rid of the debt, you will be able to stop the stress and the worrying about getting it caught up.
The debt will be paid in full and this can benefit your credit because you will be able to get back in a home quicker than you would if you let the home go to foreclosure.
What Is The Process To Get The Home Sold With A Realtor
The process of selling a home starts with the seller. The seller has to decide whether they want to put it on the market as an FSBO or hire an agent.
If they choose the first option, then they will be responsible for all the work that’s involved with selling a home, including finding and securing a buyer, negotiating, and closing.
If they choose to go with an agent, then their agent will manage all of those tasks for them and only charge them a commission fee when the sale is finalized.
When you list the home for sale with a Realtor. The Realtor will set an appointment to come see the home.
From there the Realtor will do a property inspection to see if they can see anything that needs to be repaired.
They will also check to see if there are things that need to be fixed up in the home. Once this is done the Realtor will perform a CMA.
A CMA is a Comparable Market Analysis. This is when the Realtor will locate similar properties for sale in the MLS.
The goal is to get the closest matching properties to your property which will be the subject property.
Once this is done, the Realtor will discuss the Listing Price. If you agree with the Realtor on the Listing Price.
You will then sign a Listing Agreement with the Realtor. The Listing Agreement will spell out the terms and conditions of the Listing.
It will have a start date and an expired date. Once all parties have signed.
The Realtor will either have a professional come out and take the photos, or the Realtor will come out and take the pictures and measurements.
After this is done the Realtor will then place the property in the MLS for sale.
Pros and Cons Of Selling Your Home Without Proprietary Knowledge
Selling a house is always difficult, but it gets even more complicated when you’re in a tough financial situation.
The idea of selling a home without a real estate agent or any other third-party input has been around for years.
The benefits of going pro-bono are obvious: you get to keep more of the profit and there is no commission to pay.
It’s not all roses though. If you’re not a savvy seller, then you will likely end up with a much lower profit margin because you’ll have to do most of the work yourself.
This is especially true for those typically working in the service industry.
If you know you don’t have the time to do the marketing, talk to buyers, talk to lenders, talk to different agents then it would be a good idea to consider hiring a Realtor.
Problem: You want to get your home sold, but you’re not sure what the best option is.
The biggest mistake that homeowners make when trying to sell their homes on their own, is they try to do everything themselves.
They don’t have the knowledge or experience needed to effectively market and sell a property in today’s competitive housing market.
This leads them down the path of frustration where they are constantly making mistakes and feeling like it’s an impossible task for them to complete successfully.
If this sounds familiar then you should consider hiring a real estate agent instead of attempting it yourself because…
Solution: Hiring a professional Real Estate Agent will be much more effective than doing all of these tasks yourself.
A Realtor will know how to properly stage your home so that buyers see its true potential right away.
Also, only listing with one realtor means that there won’t be any confusion about who has control over certain aspects of selling the house (negotiating, talking with buyers, or dealing with inspection and appraisals.)
How Does This Effect My Credit Score
This sounds like an easy question, but many factors can affect your credit score when you sell a home while staying in forbearance.
For example The time since last making payments or how long ago was the debt paid off?
If someone doesn’t pay on time then the credit scores are not going to look so good. Being in forbearance is no different.
The credit is not going to be the best because it will show that you are behind on your payments.
The key to this is when you pay off the mortgage debt when a payoff is ordered. This helps because the debt will showed paid in full on the credit report.
This helps you because it shortens the period you need to be able to re-qualify for a loan. The time frame would be shorter than if you were to have the property foreclosed on.
The reason is that the debt is completely paid in full. Once this is done you will then work to repair your credit.
This is when you start the process of re-establishing your credit.
There are ways to do this so that you can increase your credit score and over time it will help you to reach your goal of being able to qualify for a home again.
The Closing Process When You Sell Your Home In Forbearance
The closing process for home sellers when you sell your house starts with the contract signing.
Once you have agreed to sell to the buyer then the home would move into the Option Period.
During the Option Period, the buyers will order a home inspector to come out and inspect the property.
During this time the buyers can also bring in contractors and other licensed contractors to check out the structure and the condition of the property.
Once this is done, the buyer agent might send over a Repair Request. It would be up to you to decide whether or not you want to accept this or not.
Once this is done the property will go into pending status. From there the Appraisal is ordered.
The title is normally open the moment that the contract has been signed between the seller and the buyer.
As the Appraisal is being ordered the title company will normally send out the Title Commitment for all parties to review.
Once the Appraisal comes back then the property is moved to the final stages of closing.
The lender will finish up the loan documents and loan documents along with your payoff is sent to the title company.
Then you will prepare for closing.
Sellers will need to be in attendance at the closing of their property to sign all of the documents.
Some title companies do offer mobile closing services. You will need to ask the title company about what additional closing services they offer.
Conclusion
I hope that this article has given you a better understanding of can you sell your home while you are in forbearance.
If this information has not been helpful, please let me know. Remember, if you need help with buying and selling your home I’m only one call away.
Remember, you can pick up your phone and call me or feel free to contact me here. You are not alone if you are facing issues paying your mortgage or dealing with your forbearance plan.