Homeownership is an expensive investment in your family’s future. When you purchase a home, you do so with the expectation that it will appreciate in value. Otherwise, you would just rent. Sadly, many Americans find themselves in a position where the value of their home is less than the homeowner’s outstanding mortgage debt. This phenomenon is referred to as an “upside-down mortgage”.
There are several reasons that a mortgage can flip upside-down. One of the reasons is a fluctuation in the local or national housing market, which can leave the property value far below what the homeowner paid. Another common explanation for an upside-down mortgage is a bad loan, which either came with a high interest rate, a fluctuating interest rate, or an unadvisable amount of risk.
Regardless of the reasons, if you find yourself with a loan that exceeds the value of your home, you have some tough choices ahead.
· Keep making payments. Your home is important to you, as is your credit. This is why some people choose to continue paying off an upside-down mortgage-so that they don’t lose their home or jeopardize their credit. While this does not make a great deal of financial sense, if a homeowner can afford to make the payments, there is no faulting the sentiment involved.
· Loan modification. This involves negotiating with a bank to re-work the balance, interest rate, monthly payment, or interest rate of an existing loan. Banks are not in the business of agreeing to lose money; however, foreclosure proceedings are expensive for banks. We can help you work through the rigorous approval process to put you in your best position for success.
· Bankruptcy relief. A sad, but viable option for some homeowners with an upside-down mortgage is to walk away from the house and let your mortgage company have it. Filing for bankruptcy relief to accomplish this end can also help you obtain a discharge of the outstanding mortgage debt. In the alternative, bankruptcy can be a tool for a homeowner to remain in their upside-down home by allowing the homeowner to strip junior liens from the property or to repay missed payments over time.
Let Us Help You Move Forward
If you find yourself in the predicament of an upside-down mortgage and want to know your options, contact Levitt & Slafkes, P.C. For over 30 years, our experienced attorneys have provided smart, effective legal advice and representation to people struggling with bad mortgages. This is your home, and we respect the magnitude of the decisions that need to be made to protect your financial interests. We want to help you get relief. Call our office today at (973) 323-2953 to schedule a consultation, or reach us online.
We are proudly designated as a debt relief agency by an Act of Congress. We have proudly assisted consumers in filing for Bankruptcy Relief for over 30 years.