Florida Foreclosure Process

What is the Foreclosure Process?

When you purchase a home using a mortgage, you are making a promise to pay back what you have borrowed. A payment schedule will be created, and you will be expected to keep up with it. However, when borrowers become unable to make their payments, the home foreclosure process begins. This is the action of taking back property that has not been paid for, and the process is a detailed one. The steps include:

  • A payment is missed. Homeowners normally have a grace period of approximately 15 days before the payment is considered late. Furthermore, homeowners can explore mitigation options if they foresee an inability to pay for an extended period of time due to situations such as job loss.
  • When the account is 30 days overdue, the homeowner's credit report will be negatively impacted.
  • Once the account is four months overdue, the loss mitigation review period begins. During this time, the homeowner will be given opportunities to catch up.
  • A breach letter is then sent, and this is the official start of the Florida foreclosure process.
  • A complaint is filed with the court. The borrower gets the opportunity to file an answer.
  • A trial takes place after all evidence is reviewed. If the lender proves their case, the court establishes a Foreclosure Sale Date. The Florida foreclosure process timeline varies, and this date could be set anywhere between 30 and 90 days of the decision. On this date, the home will be auctioned off, and the borrower must leave the premise.

What to Expect When Buying a Foreclosed Home

Buying a foreclosed home can be an excellent investment as you can often obtain the home for the amount that was owed to the lender before the previous owner was evicted. There are some things to keep in mind when buying a foreclosure to ensure you have all your bases covered. For starters, it's important to understand the value of the investment you're about to make, and you should rely on your lender to identify potential issues such as broken toilets or missing appliances. While the property may be sold as-is, most banks will at least re-install appliances that are damaged or missing.

Because they are often sold as-is, you should carefully consider your investment. What may seem like a great opportunity from the outside may quickly become a nightmare once you get past the front door. An experienced Gainesville, FL, real estate company like Team Dynamo can help you carefully examine the home and identify potential issues of concern.

Should I Buy a Foreclosed Home?

Purchasing a foreclosed home can prove worth the investment, but, before making it, it's important to analyze your situation to ensure you are in a good position to move forward with the transaction. For starters, if you have negative marks on your credit history, it's a good idea to first take steps to improve your score as this will better allow you to take advantage of affordable financing options.

You should also make sure you've taken the time to save up some money to make a significant down payment. It is typically required that you cover 5 percent to 20 percent of the sale price in cash. Keep in mind that having less set aside for the down payment is costly. Not only does this require you to pay more money with interest tacked on, but you may even be required to pay for mortgage insurance. Your Team Dynamo real estate agent can help you determine the intricacies of your individual circumstances.