Charlotte NC Homeowner Tips | Upside Down Mortgage Solutions
Back in 2008 and 2009 in the wake of the last financial crisis, there was a decrease in home values across the United States. Many homeowners who had put down only a little money or those who bought a home in some of the places most affected by the crisis found themselves with an upside down mortgage. This instantly created negative equity situations for millions of homeowners.
Upside down mortgages are those that refer to the amount of money that a property owner owes on the loan. If it is more than the property’s current market value, it’s referred to as “upside down.” Upside down mortgages also refer to negative equity. This occurs when the value of an asset that is used to secure a loan is less than the balance on the loan. “Underwater” is another term used to describe assets with negative equity, and loans and borrowers with negative equity are “upside down.”
Here are some considerations you should take a look at if you find yourself in this situation. First, evaluate your home’s value. You must determine if you can still afford your mortgage and if that will change in the future. If your loan is just interest, your payment will drastically increase when the interest-only period ends. Compare your loan amount to your home’s value, and if it is worth half of your loan value, this is not a good situation, and you may have to submit a voluntary foreclosure where the bank takes possession of the home or performs a short sale.
Loan modification is another option. It may be possible to get a modification on your home’s loan in order to make it more affordable and avoid foreclosure. The government has a Home Affordability Program, which encourages mortgage companies to work with homeowners to modify loans to arrange a lower payment plan.
You can also talk to a professional with the Home Affordable Refinance Program (HARP), a government mortgage assistance program. This program allows certain homeowners to refinance their mortgage even in upside down mortgage situations where the market value of the home is less than the amount owed on the loan.
The goal of all of these programs is to keep you in your home and avoid foreclosure. Since this is a widespread problem across the country, these programs were designed to save homeowners and keep them in their homes as well as keeping their credit in good standing. While you may not qualify for all the programs available to save your home, you probably fit into at least one of the programs. That being said, make sure you discuss your options with a professional lender. Rather than responding to offers you receive from advertisements and unfamiliar companies, reach out to your trusted lender who can point you in the right direction and give you viable next steps.
This post was written for Charlotte Real Estate by Stephen K Hachey. Stephen is an Orlando Foreclosure Lawyer specializing in loan modifications, short sales, foreclosure and much more. He is also the owner of his own practice, the Law Offices of Stephen Hachey, PA.
This article is for general informational purposes only and does not establish an attorney-client relationship. Please contact a licensed attorney in your state of residence. For more information on our services, please visit our website at www.floridarealestatelawyer.org/. | Charlotte NC Homeowner Tips | Upside Down Mortgage Solutions