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Selling A Home That Is In Forbearance In San Diego

Posted by JD Esajian // June 4, 2024

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Facing financial difficulties can be overwhelming, especially when it involves your home. If you’re currently in forbearance and considering selling your home, know that you have options. This article is designed to guide you through the process of selling a home in forbearance, providing you with the information you need to make informed decisions.

What is Forbearance?

Forbearance is a temporary pause or reduction in mortgage payments granted by your lender. It is typically offered to borrowers experiencing financial hardship, such as job loss, medical emergencies, or other unexpected financial setbacks.

When you apply for forbearance, your lender agrees to reduce or suspend your mortgage payments for a specific period. During this time, interest continues to accrue, and the deferred payments must be paid back later, often at the end of the forbearance period or added to the loan balance.

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Can You Sell a Home During Forbearance?

You can sell your home while it is in forbearance. Selling a home in forbearance involves paying off your mortgage, including any deferred payments, at the closing of the sale. This is the typical process:

1. Notify Your Lender: Inform your lender of your intention to sell the home.
2. Obtain a Payoff Statement: Request a payoff statement from your lender, which will include the total amount needed to pay off your mortgage.
3. List Your Home for Sale: Put your home on the market and find a buyer.
4. Close the Sale: Complete the sale and use the proceeds to pay off the remaining mortgage balance.

Pros and Cons of Selling a Home in Forbearance

Before deciding to sell your home during forbearance, it’s essential to consider the advantages and disadvantages. Understanding these pros and cons will help you make an informed decision that best suits your financial situation.

Pros

• Relieve Financial Stress: Selling can alleviate the burden of mortgage payments and related costs.
• Avoid Foreclosure: Selling your home can prevent the foreclosure process from starting after the forbearance period ends.
• Potential Equity: If your home has appreciated in value, you might still walk away with some equity.

Cons

• Short Sale Possibility: If the home’s value has decreased, selling might not cover the total mortgage amount, leading to a short sale.
• Credit Impact: While selling can prevent foreclosure, forbearance and a potential short sale may still impact your credit score.
• Market Conditions: Selling in a buyer’s market might result in a lower selling price and a longer time on the market.

Alternative Option: Selling to Cash Buyers

Selling to cash buyers can be an excellent option if you’re in forbearance and need a quick, hassle-free sale. Cash buyers are typically investors or companies that purchase homes as-is for cash, allowing for a swift transaction. This can be particularly beneficial in a forbearance situation because it eliminates the need for repairs or extensive home preparation, which can be costly and time-consuming. Additionally, cash sales can close much faster than traditional sales, often within days, providing you with immediate relief from your financial obligations.

In the context of forbearance, selling to cash buyers can prevent the risk of foreclosure and the negative impact it can have on your credit score. It offers a straightforward solution to settle your outstanding mortgage balance, including any deferred payments, without the stress of a prolonged selling process. This can be a better option for those looking to avoid the complexities of a traditional sale and ensure a smoother, more secure financial transition.

CT Homes Makes Selling Your House Easy

Selling a home in forbearance is a viable option to consider if you’re facing financial difficulties. Carefully weigh the pros and cons of selling your home traditionally versus selling to cash buyers. By understanding your options and the steps involved, you can make the best decision for your situation.

At CT Homes, we don’t mandate a home inspection or appraisal to make our cash-as-is offer. For a smooth and stress-free property transaction, turn to CT Homes. Learn more about CT Homes’ simple as-is cash offers today!