When purchasing a home or piece of property, most lending institutions require a down payment. The actual amount of the loan will be secured by a lien which really just means that the property itself will stand good for the loan.
In all reality, until you've paid the loan off in full, the bank literally owns the property. If for some reason you lose your job, become sick or are in an accident and unable to work and therefore, can't keep up with the monthly payments, the bank may foreclose.
Foreclosure is the process in which a bank or other credit institution claims possession of your property due to non-payment. Most creditors will work with you to a certain extent, but banks are, however, in the business of making money and if after a certain time your payments are still in arrears, the property will be repossessed and sold to repay the amount of the loan.
The time required for a lending institution to reclaim the property varies depending upon which state you live in. In some states it could be as little as one missed payment, but normally you must be several payments behind before the foreclosure process is initiated.
In most instances you will be notified of the impending foreclosure and given a certain amount of time to get the loan up to date. Often, making one or more payments will delay the foreclosure proceedings giving you the chance to keep your home or land.
Properties reclaimed by these institutions are sometimes sold at auctions, other times they are listed for private sales. Since the banks main priority is getting the money that is left owed on the loan, these foreclosed properties are often sold below the actual market value.
In some instances your financial misfortune is a lengthy or permanent one and you may not have a way of retaining your home or property. If however, you're off work sick for a few months, or temporarily laid off from a job, discussing this with your lender may give you the time you need to get your payments caught up and keep your home.
In all reality, until you've paid the loan off in full, the bank literally owns the property. If for some reason you lose your job, become sick or are in an accident and unable to work and therefore, can't keep up with the monthly payments, the bank may foreclose.
Foreclosure is the process in which a bank or other credit institution claims possession of your property due to non-payment. Most creditors will work with you to a certain extent, but banks are, however, in the business of making money and if after a certain time your payments are still in arrears, the property will be repossessed and sold to repay the amount of the loan.
The time required for a lending institution to reclaim the property varies depending upon which state you live in. In some states it could be as little as one missed payment, but normally you must be several payments behind before the foreclosure process is initiated.
In most instances you will be notified of the impending foreclosure and given a certain amount of time to get the loan up to date. Often, making one or more payments will delay the foreclosure proceedings giving you the chance to keep your home or land.
Properties reclaimed by these institutions are sometimes sold at auctions, other times they are listed for private sales. Since the banks main priority is getting the money that is left owed on the loan, these foreclosed properties are often sold below the actual market value.
In some instances your financial misfortune is a lengthy or permanent one and you may not have a way of retaining your home or property. If however, you're off work sick for a few months, or temporarily laid off from a job, discussing this with your lender may give you the time you need to get your payments caught up and keep your home.
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