6 Ways to Get Out of Your Mortgage
A mortgage is a long-lasting and solid commitment that can outlast the house or homeowner. If you decide to sell a home with a mortgage on it, it may be a complicated process that requires preparation and the lender’s approval. You can sell a home for less than it is worth and pay the bank the difference, or you can consider one of the legal options that are going to be discussed in this article.
Walk Away
Walking away is probably the last thing you want to do, but sometimes you feel like you have no other option. Homeowners usually choose this option when the market value of their home falls below the mortgage amount or when their property has negative equity. The technical term for walking away is strategic default, and it usually involves informing the lender of your intention to abandon the home. In 2008, during one of the biggest mortgage crises, many homeowners used this option to get out of their mortgages.
Short Sale
Another compromise that you may consider is a short sale. This is when a homeowner decides to sell their property at a discount to a lender who agrees to accept less than the remaining mortgage balance. A short sale may be an option to consider because it gives a homeowner more control over the sale. However, it still has a negative impact on your credit score.
Deed in Lieu
A deed in lieu is an agreement between a homeowner and a lender to voluntarily return the title of the property back to the lender. In this case, the entire amount of the remaining mortgage is forgiven. However, it is important to know that a deed in lieu will have a negative impact on your credit score for four years. Also, most lenders do not like this option and do not want to consider a deed in lieu because it is quite risky for them.
Foreclosure
If you are behind on your mortgage payment, you may decide to allow the bank to foreclose on your home. Foreclosure means that the title of a property is taken by a lender due to the homeowner’s missed payments. For most lenders and homeowners it is not the most desirable decision, especially because it has a negative impact on your credit score for seven years. Lenders usually offer some repayment options and payment alternatives because the foreclosure process is also complicated for them.
Rent a Home Out
If you do not want to sell your home but need money to put towards your mortgage, renting out your home is a good option to consider. However, the main drawback of this method is that you have to have the ability to live somewhere else while your home is occupied by tenants. Renting may be a good option for those who live in an area with high rental demand. If you want to consider this option, it is recommended you talk to your insurance company first and discuss the coverage. Make sure that you check the state landlord requirements as well.
Sell to a Cash Buyer
There are many cash buyers — companies that buy homes for cash, fix them and resell them after. Selling your home to a cash buyer is one of the fastest and most effective ways to get out of your mortgage. The best thing about this option is that you do not have to pay any money out of pocket to sell your home. Moreover, cash buyers purchase homes in any condition and “as is,” meaning that you do not have to make any repairs or renovations.
If you own a property with a mortgage on it in the Tracy, Stockton, or Modesto area in CA and want to sell it fast with no hassle or negative consequences, Frank Buys Houses is ready to help you. Frank Silveria has been a home investor for over 20 years and knows everything about houses. He and his team will do their best to help people get out of tricky situations, including a mortgage. If you are looking for a home-buying company in the Stockton area that you can trust, Frank Buys Houses is a great choice. All you need to do is to visit our website, fill out the form, and wait for a phone call within 24 hours.