You don’t have to wait until you save the full amount so that you can acquire your dream home. You can simply apply for a home loan from a financial institution. In most cases, the lender will require you to finance 20% of the loan amount. However, if you have a high credit score, the lender could finance more than 80% of the home purchase.
What is required for you to take a Home Loan?
The financial institution will require you to sign two documents before they give you the loan. The first one is called a promissory note. This is whereby you accept responsibility for the loan and agree to make regular monthly payments.
The second document is known as the deed to secure debt. When you sign this second contract, you give the lender the right to auction your house in case you fail to clear the debt. The act of taking away your house due to a default in payments is called foreclosure.
There is usually something known as pre-foreclosure. The lender won’t immediately take your home if you are late on one payment. However, they will charge you a late fee when you make that payment.
The pre-foreclosure phase comes before the actual foreclosure. You could be experiencing financial difficulties or emergencies and that’s why you are unable to keep up with the payments. To protect yourself from a foreclosure, you can approach the lender and see whether you can come up with an alternative repayment plan. This is also called a loan modification.
In Georgia, the lender requires you to provide your financial information, proof of employment, and tax returns for your loan modification application. If the data satisfies the requirements for a modification, your application will be approved, and your monthly payments will be reduced. However, this process may take a while, and it’s not guaranteed.
If the lender has not put you on a trial modification program, look for alternative ways to clear your payments. You could take an extra job so that you can have enough for the next payment. Just prepare yourself financially incase the loan modification application doesn’t go through.
What to Expect During a Foreclosure
According to Federal law, the lender must wait until 120 days have passed before they can send you a notice of intent to foreclose. That means that you have 4 months to get your loan modification application approved. It could also mean that you have 4 months to get your finances in order and resume loan repayments.
The notice is usually drafted by a bank employee given authority to negotiate and modify terms of the home loan or mortgage. They have to include their name and contact details on the notice. The lender has to send the notice by certified or registered mail. You cannot invalidate the notice by refusing to accept it.
After that, the lender has to publish the notice in the official county newspaper for four consecutive weeks. In case they fail to do that, they have to convince the superior court of the county, where the home is located, that they have the legal right to repossess your property due to failure to make payments. If the court is satisfied with the proof, the foreclosure sale can happen.
The foreclosure sale officially transfers ownership to the lender. The bidding happens on the first Tuesday of the month. The lender may be the only bidder. In that case, they win the bid and repossess your house.
After the foreclosure sale, you have to vacate the house. You can go back to court and sue the lender for any additional amount that they may have earned from the sale of the house.
Before you take a home loan, make sure that you are financially prepared. Your income stream should be steady. This way, you can avoid embarrassing and costly foreclosures.
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The Law Office of Barbara B. Braziel helps people get out of debt. We offer free consultations to people of Savannah, GA and the surrounding areas, including Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Ludowici, Springfield, Pembroke, Brooklet, and Garden City.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.