Walking Away Home a Negative Equity Mortgage
If you recently purchased a home and found that you’re stuck in a negative equity mortgage, walking away can be the hardest decision of your life. You now owe more money to the mortgage company than what the house is actually worth. Owning negative equity home is a major responsibility that can cause a lot of stress. You have a few options available to you.
Your first option is foreclosure. Essentially, foreclosure is when the lender takes possession of the property once the mortgagor fails to make monthly payments. It’s a scary solution, though.
Unfortunately, a foreclosure will appear on your credit report for at least seven years. However, it’s an option to get out from under a negative equity mortgage.
A short sale is when the mortgagor sells his or her home to a third party for less than the remaining debt on the mortgage. In exchange, the lender agrees to accept the proceeds of the sale in exchange for your release on the mortgage contract. You are out from under the mortgage but won’t have many funds to purchase a new home.
Real Estate Investors
Your other option—and perhaps the most lucrative of all three—is to sell your home to a real estate investor. You’ll receive cash for your home, which you can then use to get the mortgage company off your back, and you’ll hopefully have enough to buy a new home or rent an apartment in the city.
With a real estate investor, it takes one phone call. You call their office, they arrange a time to meet, and then you’ll receive a cash offer within 24 hours. It’s simple and lucrative.