WHAT TO EXPECT WHEN YOU STOP PAYING MORTGAGE
Foreclosure can be a scary thing. If you fear that you will experience foreclosure or are already going through pre-foreclosure, you should know that there is still hope. You don’t need to sit by idly and watch your home and your equity slip away. By working with qualified Pembroke Pines foreclosure specialists, you can fight for your property and your future.
Here at Redhead Realty, we know how hard you’ve worked for your property. For every day of the preforeclosure process, you lose a little of what you’ve put into your home. We want you to know about your options and navigate you to a better outcome.
How Does Foreclosure Impact Your Equity?
Before you learn more about preforeclosure, you should understand a little about equity. Home equity refers to the difference between the present market value of a home and the amount the owner still owes. More simply put, it’s the portion of the home actually owned by you. If you bought a $300,000 home and already paid $100,000 towards it, your equity would be $100,000.
If your home goes into foreclosure, some of the equity is still yours. However, the amount of equity you can keep varies according to state laws. In many cases, the lender sells the home and has more money than the remaining balance on the loan. Once the loan and other fees are paid off, the remaining money is equity. It can go to your bank account.
How Preforeclosure Impacts Your Equity
Even before foreclosure takes place, your equity can be decreased. This is because you face penalties for being late on your mortgages. When you make a late payment, you incur fees. Consider this example. You miss four months of mortgage payments. After the fourth month, your loan goes into default. You get four months of late payment penalties added to your loan amount.
When the bank sells your home, more money from the sale of the home goes towards the loan and late fees. Your left with less equity. There are many other fees associated with preforeclosure and foreclosure. After everything is complete, you could have thousands of dollars less in equity.