Homeowners Today Have Options To Avoid Foreclosure

Despite the most recent data, experts concur that the likelihood of a significant foreclosure crisis akin to the 2008 event is minimal. Although recent headlines may highlight a slight increase in foreclosure filings, the overarching perspective indicates that we remain considerably below the levels typical of a standard year in the housing market.  As a report from BlackKnight explains:

“The prospect of any kind of near-term surge in foreclosure activity remains low, with start volumes still nearly 40% below pre-pandemic levels.”

That’s good news. It means the number of homeowners at risk is very low compared to the norm.

However, there exists a minority who might encounter the prospect of foreclosure. This is due to the possibility that certain homeowners may encounter unforeseen hardships in their lives, a circumstance that can unfortunately arise in any market.

For these homeowners, there are still avenues available that could prevent them from undergoing the foreclosure process. If you find yourself grappling with challenges, an informative piece from Bankrate outlines several avenues worth exploring.

• Look into Forbearance Programs: If you have a loan from Fannie Mae or Freddie Mac, you may be able to apply for this type of program.
• Ask for a loan modification: Your lender may be willing to adjust your loan terms to help bring down your monthly payment to something more achievable.
• Get a repayment plan in place: A lender may be able to set up a deferral or a payment plan if you’re not in a place where you’re able to make your payment.

And there’s something else you may want to consider. That’s whether you have enough equity in your home to sell it and protect your investment.

You May Be Able To Use Your Equity To Sell Your House

In today’s real estate climate, numerous homeowners possess significantly more equity in their homes than they realize, primarily due to the swift appreciation in home prices witnessed over recent years. This suggests that if you’ve been residing in your property for an extended period, it’s probable that your home’s value has appreciated. Additionally, the mortgage payments made during this time have gradually reduced the balance of your loan, potentially further augmenting your equity. If your home’s present value exceeds the remaining balance on your loan, this surge in equity could present advantageous opportunities for you.  Freddie Mac explains how this can help:

“If you have enough equity, you can use the proceeds from the sale of your home to pay off your remaining mortgage debt, including any missed mortgage payments or other debts secured by your home.”  

Lean on Experts To Explore Your Options

To find out how much equity you have, partner with a local real estate agent. They can give you an estimate of what your house could sell for based on recent sales of similar homes in your area. You may be able to sell your house to avoid foreclosure.

Bottom Line

If you’re a homeowner facing hardship, lean on a real estate professional to explore your options or see if you can sell your house to avoid foreclosure.