Can I sell my house if I'm behind on payments?

Unfortunately, life happens sometimes. Occasionally it'll throw huge curveballs and in some cases, can cause financial devastation that leaves you unable to pay your mortgage, or taxes.

If you are behind on your mortgage and you don’t foresee your circumstances getting any better, then you may wonder what your options are.

One option is to sell the house before the foreclosure process to avoid foreclosure and the hit it can cause your credit.

But is selling your house an option if you are behind on payments?

Read on to answer your question of “Can I sell my house if I’m behind on payments?”

Options If You’re Behind on Mortgage Payments

If you are behind on your mortgage payments, you do have options that you can consider if you don’t want to rush to sell your home right away.

Here are some other options that you can look into if you’re behind on your mortgage payments.

Loan Modification

A loan modification is an option if foreclosure is looming, but you want to keep your house.

You should contact your lender as soon as you realize that you may be struggling.

If you can afford you mortgage payments with a lower interest rate and still have stable income coming in, your lender may work with you on a loan modification.

In order to qualify for one, you’ll often need to offer them a “proof of hardship”, which shows why you cannot make your mortgage payments.

If you do qualify, they will initially start with a trial period for the loan modification.

If you can pay on time with the new terms for around 90 days, they will finalize the loan modification.

This can be a lengthy and frustrating process, however, so you should be prepared for that.

Bankruptcy

You could also go the route of filing for Chapter 13 bankruptcy.

Even if you file for Chapter 13 bankruptcy on the day prior to your house being sold through the foreclosure process, you can still prevent the foreclosure from going forward.

However, it’s best to start this process long before this time.

With a Chapter 13 bankruptcy, you are still required to pay back what you owe on your mortgage with a 3-5 payment plan.

If you are unable to meet the needs of this repayment plan, then a bankruptcy isn’t the best option for you to consider.

Mortgage Forbearance

You could also try to get a mortgage forbearance if your lender offers that option.

This is an option where you don’t get complete forgiveness over your missed payments.

It’s also not a single solution for everyone who requests one, as the terms of the forbearance are typically pre-determined and outlined in your origination documents.

A mortgage forbearance is a way to offer you short-term relief, especially if the reason you’re struggling to pay for a mortgage is because of serious situations that just arise.

These situations include major medical bills, significant damage to your home that needs to be repaired, or you have lost your job.

You can ask for a mortgage forbearance before you fall behind on your mortgage, which will either suspend your monthly mortgage payments or offer a lower monthly payment to something that you can better afford.

The length of the forbearance can depend on whatever terms you’ve agreed to with the lender.

Are You Able to Sell if You’re Behind on Mortgage Payments?

Absolutely. If you are behind on mortgage payments or even taxes, you can still get out of that situation.

The final option, if it suits the circumstances is to sell the home.

Here, you have 2 main options: a short sale or selling your home to a real estate investor.

You do also have the option to sell using the traditional approach.

The problem with this is that you may not be able to sell your home before the foreclosure happens, which can create problems for your credit score and other headaches.

Short Sale

You can sell your home if you are behind on mortgage payments.

However, this means that you are underwater on mortgage and likely owe more on your house than the house is actually worth.

If this is the case, your option for selling the house is through a short sale.

This will satisfy the lender and you won’t have to worry about a foreclosure on your credit report.

A short sale means that you are selling your home for a lower price than you would get if you sold it through the traditional means.

There are situations where you can negotiate with the short sale lender to see if they will cover the outstanding balance of your loan.

It’s also important to know that a short sale can have a negative impact on your credit score, which means that you should have your next home already lined up and secured with financing before you go through with the short sale process.

Selling to an Investor

Another option for selling your house is to sell it directly to an investor for a cash offer.

This can oftentimes be the best solution for most people in this situation.

This can be an appealing option for a variety of reasons.

First of all, you will get a cash offer and can quickly close on the house.

This can be a process that only takes a matter of a couple of weeks.

Another reason why this is a great option is because the sale closes quickly, you can avoid going into foreclosure.

Foreclosure can have such a significant impact on your credit history, that doing whatever you can to avoid this problem is ideal.

A final reason why selling your home to an investor is a great option is because you don’t have to prepare the home for sale.

You don’t need to make any cosmetic changes or fix any problems to sell your home with an investor.

An investor like Keystone Home Buyers will often purchase your home in as-is condition, so you don’t have to spend any money preparing your house for sale.

Conclusion

Instead of selling your home through the traditional home seller process, a cash offer may be the best solution.

A real estate agent has a long process to sell a home and you may not be able to sell it before the foreclosure process is over.

This is why taking a short sale option like one offered by an investor like Keystone Home Buyers might be the most beneficial if the circumstances match.

If you find yourself in a difficult situation like this and need to sell your house fast, give Keystone Home Buyers a call at (814) 204-2266.