More American homes are at risk of foreclosure today than ever before. Foreclosure is the legal procedure by which a mortgage lender seeks to recoup the sum owing on a non-repaid debt by seizing and selling the mortgaged property. While many factors might cause a foreclosure, there are some measures that homeowners can take to prevent the financial ruin that a foreclosure entails. The most typical reasons for foreclosure are explained below.
1. Negative Equity
Negative equity or being underwater is the primary contributor to foreclosure. Generally, it is caused by downturns in the property market. In a situation of negative equity, the homeowner owes more on their mortgage than the value of their home due to a decline in the property value. When a homeowner experiences negative equity, their best option is to sell the home. They can also refinance if selling the house is not an option.
Even the best-laid financial plans can fall apart when a person loses their job unexpectedly, regardless of how carefully they manage their money. It can be tough to keep up with mortgage payments without a consistent source of income unless a homeowner has a significant sum of money saved before going unemployed. If you know your home will go into foreclosure, one of the best tactics we can suggest is to contact us and say, “I need to sell my house fast in Upland.”
3. Increasing Interest Rate
Several foreclosed houses had meager initial mortgage rates, only for those rates to skyrocket a few years later. Homeowners may find it challenging to make their mortgage payments as a result. The fact that subprime mortgages are obtained mainly by homeowners with poorer credit scores further complicates matters.
The idea when married couples purchase a home together is that there will be dual sources of income to handle all necessary expenses. After the dust settles and the divorce is finalized, individuals may struggle to pay the mortgage and utilities when one person can’t afford to pay the monthly costs on their own.
Are You Dealing With Foreclosure?
Homeowners who put off fixing an issue too long face the risk of running out of time and being unable to sell the house before it goes into foreclosure. If you need to sell your house quickly and are in danger of foreclosure, let Diamond Home Buyers Inc. assist you in finding a solution. We buy houses in Upland in any condition and can help you prevent foreclosure.