How Soon Do I Have to Move Out After a Foreclosure?
During the Great Recession, thousands of Minnesota families foreclosed on their homes. According to the Minnesota Homeownership Center, there were 8,313 foreclosures in Minnesota in 2014 alone. That number has dropped since then, but there are a lot of Minnesota families across the state who had to move out of their homes and neighborhoods...and it's still happening.
When you're going through a foreclosure, it can be stressful and confusing. So hopefully this post will help clear up questions about when you need to move out after a foreclosure.
In a "regular" foreclosure by advertisement** in Minnesota, the borrower typically has up to six months to remain in the house after the sheriff's sale. What that means is you can keep living in the house during those six months without making mortgage payments, BUT you still have some responsibilities. And it's a crucial time that you should be planning and saving.
Keep paying and remain current on utilities.
Continue to maintain the property. Mow the lawn, shovel the driveway, etc.
Start saving as much money as you can for moving expenses like rent, deposit and a truck rental.
If you have an idea how much you'll be paying in rent, set aside that amount in savings so you get in the habit and can practice "paying" that amount. If you don't know what your rent will be, estimate it the best you can. Once you move into your new place, you'll already have a safety net set up for unexpected events or emergencies.
Search for a new place to live that is affordable for you or you and your family. Try to secure housing at least a month or two before you need to be out, so you're not scrambling at the last minute.
Make sure you're out of the house by the end of your redemption period. If you're not out by then, you could get an unlawful detainer (a.k.a. eviction), which can make it even tougher to find housing when that goes on your credit report.
Create a budget that includes your new housing expenses when you move. Don't forget about renter's insurance!
With all of that said, maybe you found a new job in another state. Or maybe you decided to move in with a friend or family member for a little while, which is a great way to save money. If that's the case, it might be cheaper for you to move out before the end of your redemption period (i.e., the six months after the sherrif's sale), because then you wouldn't have to pay the utility bills and keep up on the property. If that's your plan, contact your mortgage company/servicer right away to let them know when you're planning to move out. Some servicers may even offer people a little bit of money to leave earlier; this is called "cash for keys." Like I said, not all do this, but it can't hurt to ask about it if you plan to move out early.
Regardless of when you actually move out, it's time to focus on a fresh start and make the smoothest transition possible for you and your family. You will set yourself up for success by planning ahead and saving up money right away.
If you live in Minnesota and need help preventing foreclosure, contact LSS at 888.577.2227 for a free housing counseling appointment. Outside of MN, visit the HUD website to find a HUD-approved housing counseling agency like LSS Financial Counseling.
Moving on after foreclosure, but still have credit card debt? You may want to check out your debt repayment options and see if you could be saving money on payments and interest -- especially if you could pay them off more quickly. Contact LSS Financial Counseling today at 888.577.2227 for a free and confidential budget counseling session. Or, click HERE to get started online right now.
**For a more detailed foreclosure timeline and information, visit the Minnesota Homeownership Center website.