5 Real Estate Misunderstandings During the COVID-19 Pandemic
The COVID-19 pandemic has the real estate market all over the place. In the last year, the market has dropped and boomed in a matter of months. The confusion in homeowners and home sellers has spiked at an all times high.
The Local Records Office has listed 5 of the most misunderstandings in real estate going on right now. Everything from banks, to foreclosures and everything in between. Foreclosure is a legal process in which a lender attempts to recover what the buyer couldn’t afford to pay.
This happens when the homebuyer stops making the required monthly payments. But what most people think about foreclosure is really just a myth.
1. Missing a Payment Will Have the Bank Taking the House Back
As a homeowner, you have a legal obligation to pay back the loan you took out, the bank does not want to take your house.
By law, the bank has the power to do what it takes to get back the money still owed to it. The last thing banks want to do is start foreclosure proceedings, that’s why extensions will be given when possible. Keep in mind that banks are running a business just like any other; they have to make money too.
COVID-19 has homeowners worried about losing their homes to the bank. But even with 44.2 million people filing for unemployment the market is surprisingly strong. Some experts even consider the real estate market to be at its highest since its ever been due to the coronavirus pandemic.
“Missing a payment isn’t the last in the world. Bank doesn’t want to take your home, banks want to help new homebuyers live the American dream of owning a home, but they also want to get paid back for the loan the homeowner took out” say, Curtis Lawndale of Angelinos Real Estate Group, in Los Angeles, CA.
2. Refinancing With One Lender is Your Only Option
The first thing most homeowners can’t afford to pay the monthly mortgage do is to try to refinance to pay off the existing mortgage to stop the foreclosure proceedings. If your options are slim and can’t find a traditional lender, you will likely need what is called a ‘hard money lender’.
Hard money lenders are private investors; hard money lenders could be private lenders, a group of private mortgage brokers who use their own money, and or a group of investors.
“These types of loans have pros and cons so you need to evaluate what works best for you. You will also need a stable income and some serious equity to qualify for a new loan,” says, Lawndale
3. You Will Get the Boot Right Away
Technically the homeowner doesn’t have to leave the property until the house goes up for public auction at the county courthouse, therefore, being the last step in a foreclosure process.
“People think they have to leave right away, which isn’t the case. You can live there until the last day of the public auction and even then you can ask the new homeowner for a few more weeks” says, Lawndale.
4. Negative and Delinquent Accounts Will Taunt Your Credit Score
This is one of the biggest myths on this list. Yes, your credit will be affected but just like any other negative delinquent accounts on your report, they will only be there for 7-years. Most people can reestablish good credit after two to three years by making payments on delinquent accounts.
5. Delinquent Accounts in Your Past Will Prevent You From Being Able to Buy A House Again
Having delinquent accounts on your credit history is never good but it’s not the end of the world. Many people who have been in foreclosure proceedings have received a second chance. Even with slim chances of getting a loan with low-interest rates people find a way to make it happen, don’t let a foreclosure stop you.
Good credit scores are a great path to financial freedom but they have to be maintained regularly.