If homeownership is no longer affordable, there are options to help you exit your home without facing the costly impacts of foreclosure. One option may be selling with equity.
If you are in jeopardy of losing your home, you have several options for exiting your home to avoid the stress and related expenses of a formal foreclosure. One solution may be to leverage the equity you have built over time to pay off your debts and start over with a clean slate.
What does it mean to sell with equity?
Equity is the difference between the market value of your home and the amount you owe on your mortgage. Homeowners build equity over time by making mortgage payments. The amount of equity you have in your home can also be impacted by appreciation in its value. If you have built enough equity in your home, you may be able to sell it for a profit.
If exiting your home is the best option for you, selling with equity may be a good option. When selling with equity, you are using the proceeds from selling your home at a higher price than the amount you owe on your mortgage to pay off your remaining mortgage debt.
How can my home equity help me avoid foreclosure?
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.
Once your mortgage and related debts are paid off, any excess money made from the sale of your home will be yours to keep. This money can be helpful in paying down other debts or helping you secure new housing.
What if I do not have enough equity to cover my debt?
If you do not have enough equity in your home to cover the amount you owe on your mortgage, there are other ways you can avoid foreclosure. If you are having trouble paying your monthly mortgage, you should contact your loan servicer immediately to discuss your options.