The answer is YES and NO! Yes you can give the house back to the bank. Even though in actuality you’re not actually giving the house BACK since the bank never really owned it to begin with. Instead you will be deeding the house over to the lender, referred to as a ‘Deed-in-lieu’, as opposed to making them go through the lengthy foreclosure process. One that can take 2 years or more in New Jersey. Some foreclosure have been in the courts for almost 5 years!
However, NO this cannot be done without it costing you your good credit rating. While a deed-in-lieu won’t necessarily drop your credit as much as a foreclosure, a lender will still look at it negatively and it could cost you a chance at buying a new home. Expect to have to wait at least 3 years or more before you are eligible to buy another home.
And the process for doing a deed-in-lieu can be long and filled with tons of paperwork. It can sometimes take up to a year or more. It is often NOT as simple as signing a deed over to the bank. A better way to rid yourself of the property should you find yourself in a financial dilemma and the house to be “under water”, is to sell your house via ‘short sale’.
What Is A Short Sale?
In a short sale, the home is still owned by the borrower.
The definition of a short sale is… “A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens’ full amounts and where the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt” (source: Wikipedia)
In some cases, a short sale is an option agreed upon by borrowers and lenders. In a short sale, the home is sold for less than the outstanding balance of the mortgage. The unpaid balance (known as the deficiency) may or may not still be owed by the borrower.
This option typically takes some time, as a few different lending institutions may own the mortgage. All parties who have a stake in the property must agree to the terms of the sale, and a potential deal could fall through if even one lender doesn’t agree.
We Buy Local New Jersey Houses… Can We Make You An Offer?
Here at We Buy NJ Real Estate, LLC we buy houses in New Jersey and we may be able to help you get out of your house and avoid a costly foreclosure or lengthy deed-in-lieu.
The process is really simple:
- Fill out the form over here, or call us at (908) 320-7995 and we’ll make you an offer within 24 hours.
- If you accept the offer we’ll get the documents drawn up and come out and visit you in your home to go over the paperwork. Or you can take the paperwork to your attorney and have him/her look it over. We’ll even pay the legal fees involved in doing so!
- We buy your house when you want us to (in as little as 7 days) at a reputable local closing agent.
That’s it!