The number of Americans struggling to keep up with their mortgages is astronomical, and many of them are wondering what happens if you foreclose. It’s scary to even think about it. If you are falling behind on your payments, how long do you have until the bank forecloses on your home? Will you have enough time to pack all of your things before you have to move out?
The amount of time you have depends on where you live, unfortunately, so there is no way to give all of the answers in one short article. However, you should know that there are guidelines your lender must follow and they always include giving the owner of the home notice of the impending foreclosure. As for the actual amount of time given, you’ll need to research the laws in the state where you live.
In some states, even after the foreclosure auction there is a chance to get your home back. The period of time involved can range from a month to as much as year and is known as a redemption period. At any time during this period, you can pay off the entire amount owed to the lender including legal fees and they must let you take back ownership of the house.
Another thing you might be worried about is what happens to your credit when you foreclose. Obviously it is going to be impacted in a negative way and it will be more difficult for you to obtain new credit lines following the foreclosure of your home. However, if you are able to start paying everything on time afterward, you could be qualified to purchase another home in as little as two years.
Although the foreclosure will remain on your credit for as long as seven years, it will have the most negative consequences during the first year. Once lenders start seeing positives show up on your report, they give less weight to the older negatives. As time passes, your recent on-time payments will be given more credence than your past failures.