Becoming a homeowner is one of the happiest events in many people’s lives. But when times get tough, it can be difficult to scrape up the money to pay mortgage payments each month. If you’ve accumulated enough equity, you can sell your home at a profit and get on with your life. But what happens if you owe more on your home than it’s worth?
Many homeowners face the heart-wrenching decisions associated with these problems. Some choose to negotiate with their lenders, hoping for a solution that will allow them to catch up on payments and keep them in their homes. Others feel hopeless, believing that there is no chance that they will be able to keep up payments even with help. Those who fall into this category often choose to walk away from their homes.
Losing your home brings forth a deluge of emotions. It’s a sad event, and it may also make one feel angry or ashamed. It’s certainly not ideal, yet desperate homeowners often feel that they have no other alternative. But in most cases, there is help available.
Talking to your lender could be more fruitful than you might imagine. With the abundance of foreclosures going on today, many are willing to go to great lengths to help homeowners stay in their homes and meet their obligations. Paying extra each month to catch up on payments is one option, but it may not be the only one offered. The lender may be agreeable to bringing a homeowner back to current status and accepting lower payments for a longer period of time, or even lowering interest rates to reduce payments and the amount owed.
If your lender isn’t helpful, there are non-profit organizations that can help. They employ trained negotiators that know what it takes to persuade lenders to work with borrowers. They can also inform you of your legal rights, which is something that lenders may hesitate to do. These organizations usually charge nothing for their services.
The Consequences of Walking Away
If you do end up walking away from your home, there are certain consequences that you should be aware of. One of the most significant is a foreclosure’s effects on your credit record. You can expect your credit score to drop by a few hundred points, seriously harming your chances of getting any kind of credit for several years. In most cases, the foreclosure itself remains on your credit report for 10 years.
There’s also the chance that you could be held liable for the difference between the profit the lender makes from your home’s sale and the balance of your mortgage. Lenders often sell homes to the highest bidder, and if that bid doesn’t satisfy the mortgage amount, they will want to recover the rest. In some cases a lender may agree not to pursue payment if the borrower agrees to a deed-in-lieu of foreclosure or a short sale, but they are under no legal obligation to do so.
Sometimes, walking away from your home is unavoidable. But in most cases, there are alternatives available. If you find that you’re in danger of losing your home, talk to your lender or a professional immediately. You might find that your chances are better than you thought.
Also if you want to read the https://topcreditcardsreviewed.com/kay-jewelers-credit-card/ article on this link will be very useful