If you finding yourself thinking about foreclosure and the possibility of facing it, you might be doing some research to find out more about it. During this research you have to be careful what you believe, there are a lot of foreclosure myths floating around out there. This article is going deal with some of the biggest foreclosure falsities.
The bank wants my house.
This is not true at all, the bank does not want your house, they just want the money that you owe on it. Foreclosure is a very expensive process for the bank to go through as well and they will usually work with homeowners to find solutions to stop the foreclosure.
If there is a foreclosure on my credit I can never buy a house again.
Yes a foreclosure can be viewed very negatively on your credit report from future lenders. But even so, some banks may offer you a loan very soon after foreclosure. You will need a large down payment and have high interest rates. They will mostly be loans that prevent you from buying another house that you cannot pay for in the future. After 4 to 7 years of rebuilding your credit properly you can go to a bank and the foreclosure will be like it never happened.
A chapter 7 bankruptcy will save and stop the foreclosure on my home.
A chapter 7 bankruptcy will only temporarily stop the foreclosure process on your home. It will buy you time if you are looking for alternative solution to foreclosure. But eventually the process with start back up. A chapter 13 bankruptcy has better chance of actually stopping the foreclosure.
Once I’m far enough in the foreclosure process, there is no stopping it, even with the amount of money owed on the home.
In most states if you have all the money you owe the bank for back payment and legal fees, they will stop the foreclosure process and you can save your home. You must look into your state foreclosure laws though, because this is a state law not a bank law.
I haven’t paid my mortgage and nothing happened. Nobody foreclosed or contacted me about missing my payments, so I won’t worry about it.
With many banks changing hands and being bought over by other banks now a days, files can get misplaced or there is a transition period where nothing happens. Eventually you will hear from the bank and they will start the foreclosure process. It is best to talk to lender when you think you are going to miss a mortgage payment, not after you miss several. Don’t wait for them to contact you, you need to contact them and start looking for a foreclosure solution.
The bank doesn’t expect me to pay their legal fees due to the foreclosure.
Actually they do and you will have to if you want to keep the house. This is usually stated in everyone’s mortgage documents, in plain language. Usually it can be anywhere between $1500 and $5000.
When they foreclose on me they can take all my stuff.
You get to keep your personal property, but permanent attachments to the house must stay.
Hopefully some of this will help clear up any questions or thoughts you had about foreclosure.
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