Pre-foreclosure Explained
By Evelyn Evans

If you have never heard of "pre-foreclosure" before now, that is probably a good thing. Generally speaking, foreclosure is when you stop making mortgage payments on your home and in turn, the lender begins to consider repossessing your home. As you can imagine, this is a situation that nobody wants to get involved with.

With that being said, what is pre-foreclosure? It is the first step down the road of foreclosure while you still have the option of selling your home. The nice thing about pre-foreclosure is that you will have the chance to get rid of your home before the bank takes it. This can work out to your advantage in many different ways. For instance, if you can sell your home during pre-foreclosure you may be able to get enough money to pay your back payments, while also getting rid of your outstanding balance. If you could pull this off you would be in a much better position than waiting for foreclosure and coming out with nothing.

How will you know if you are in the pre-foreclosure phase? If you have a mortgage, you are well aware of the fact that you need to pay it on time each month. If you neglect or are unable to maintain timely payments, your lender will contact you about why you are falling behind. If your payments are late too many times, the next step is for the lender to send you a foreclosure notice. This is your signal that you are in the pre-foreclosure phase. Although it may seem like it is too late, as mentioned above, you can still look into selling your house during pre-foreclosure so that you do not lose out on everything.

Again, the pre-foreclosure stage is simply a prelude to foreclosure alerting you to the coming danger if you do not make your payments. It takes place before your home is repossessed by the lender and gives you one last chance to either pay or sell before losing your home. If you feel that you are close to entering pre-foreclosure, your best bet is to get in touch with your lender before this happens. You may be surprised at the help lenders are sometimes willing to extend. Communicate your situation with them and see if they are willing to extend grace for a short time. But if that does not work, learn as much as you can about pre-foreclosure and foreclosure processes and then look into possibly selling your home.

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