Selling Your Chattanooga TN Home While In Forbearance To Avoid Foreclosure
As the global coronavirus pandemic took hold, millions of Americans opted for mortgage forbearance to help them combat the economic impact. This unique opportunity helped provide a respite for homeowners, giving them peace of mind their family was safe and had a roof over their heads.
However, with many of these periods coming to an end, many people are now wondering if they can sell their Chattanooga TN home while in forbearance. In this blog, we are going to highlight the various options that you have available to you.
What Happens When The Forbearance Period Ends?
Forbearance is the process that allows homeowners to not make any mortgage payments during the agreed period. For example, a 12-month agreement will mean a homeowner will not have to make any payments for the year and will not be at risk of foreclosure during that time.
However, when the agreement ends, the bank will expect you to pay back what you owe alongside interest and fees. Typically this can be done three different ways and you’ll need to talk to your lender to see what they can do for you.
Reinstatement: This is the most common exit method from Forbearance. Reinstatement means that you pay all the back due payments plus any interest and fees in one lump sum. You then resume making monthly payments as normal.
Repayment plan: For those that do not have the funds to pay all the back due payments, interest, and fees at one time, some lenders will allow you to spread that amount over a period of time, usually not longer than 12 months. This amount is added to your regular monthly mortgage payment.
Mortgage Modification: This is not as common, but some lenders may allow you to modify the terms of your mortgage. In practice, this is similar to a refinance. You and the lender agree to a new set of terms for the loan and you begin making monthly payments again.
So what happens if your forbearance period ends and none of these options work for you? The unfortunate answer is the bank can foreclose on your home and any equity you have in the house will be lost. In this scenario, the best financial move may be to sell your home to avoid foreclosure and hopefully walk away with some cash to start new.
Can you sell your Chattanooga TN home while in forbearance?
One thing many homeowners want to know is whether they will be able to sell their property while still in a forbearance agreement. The short answer is Yes. There are no restrictions on selling your home while in forbearance. Any proceeds from the sale price must first go to pay off the mortgage and any back due payments and fees from the forbearance period. Anything over that amount will then go to the seller.
That means selling your property might be what you need to help get yourself back on track and avoid foreclosure. How you sell your home in Chattanooga, TN, is entirely up to you, although there are a number of considerations you should remember.
Using a realtor might seem like the easiest option, but it can also be a much slower process. With average sales sometimes taking up to six months, using a realtor is not always a viable solution if your forbearance period is ending soon. There is also a range of costs involved in using these services, from realtor fees and closing costs to having to make repairs and upgrades to make the home more attractive to prospective buyers.
If your Chattanooga TN home is coming to the end of its forbearance period and you are in need of a quick sale, then a cash buyer is one of the best options. By selling your property to a cash buyer, you will be able to significantly reduce both the time taken to sell your home and also the costs involved.
With a cash home buyer, you will not have to pay any fees or commissions. Not only that, but you will also be able to sell your home ‘as is’, ensuring you will not need to make any repairs or renovations.
Looking to sell your home quickly?
If you are coming to the end of your forbearance period and are looking to sell your Chattanooga TN home quickly, then New Horizon Home Buyers is here for you. We know that homeowners in forbearance need a solution that works, which is why we offer a smooth and fast house buying process for your property.
We are passionate about real estate, and we purchase homes across Tennessee and North Georgia, no matter their condition. By working with us, you will not need to pay any fees, repairs, closing costs, or even cleaning bills. We’ll buy your property as is with a fair cash offer.
“Erik and Jessie were really easy to work with. They were fair and honest negotiating the deal and made the whole process simple! Highly recommend New Horizon!”
Have Questions About Selling Your House To New Horizon?
Get A Cash Offer For Your House & Avoid Foreclosure
New Horizon Home Buyers has often worked with people in this exact situation. We helped them avoid foreclosure by purchasing their house before their forbearance period ended. Get Your Offer today and see if we can do the same for you.