Although experts say there is no danger of large-scale foreclosures in Albuquerque, many Albuquerque homeowners may face foreclosure as a result of financial problems. Although the overall percentage of homeowners facing foreclosure is decreasing, many people today still face challenges.
It might be a good idea to research and understand your options if you have yet to take advantage of the forbearance period. To understand foreclosure, you need to know what it is. Investopedia defines it this way:
“Foreclosure is the legal process by which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property. Typically, default is triggered when a borrower misses a specific number of monthly payments . . .”
In general, you can avoid having to go through the foreclosure process if you follow these alternatives:
- Loan modification
- Deed-in-lieu of foreclosure
- Short sale
It’s worth looking to see if your home has enough equity to protect your investment before you take any of those steps.
Understanding Your Options
You have equity in the home if you owe less than its fair market value based on factors like price appreciation.
Many homeowners don’t realize how much equity their homes have in today’s real estate market. There has been high demand for housing over the last year, but low supply. The result has been a substantial increase in home values. Equity in a house rises as prices rise.
Approximately $33,400 worth of equity has been added by homeowners over the last 12 months, and the average equity on mortgaged homes now stands at $216,000, according to CoreLogic.
How does that affect you? Chances are, the value of your home and thus your equity have increased over the past year. The mortgage payments you’ve made over time have chipped away at the balance of your loan if you’ve lived in your home for some time. It may be possible for you to benefit from an increase in home value when your loan balance is higher than what the home is currently worth.
CoreLogic’s President and CEO, Frank Martell, elaborates on how equity can help:
“Homeowner equity has more than doubled over the past decade and become a crucial buffer for many weathering the challenges of the pandemic. These gains have become an important financial tool and boosted consumer confidence in the U.S. housing market.”
Contact Your Albuquerque Real Estate Experts
Sandi Pressley and her team are local real estate professionals who can give you a realistic assessment of your home’s value in today’s market. Using recent sales of similar homes in your area, we can give you an estimate of what your house could sell for. Because home prices are still rising, you may be able to avoid foreclosure by selling your house.
It is also possible to get assistance from your agent if you need to explore other options. Our team can connect you with professionals in the industry, such as housing counselors, who can examine your unique situation and offer advice on next steps if selling is not your best option.
Get help from a real estate professional if you’re a homeowner facing hardship and you’d like to avoid foreclosure. Contact us today!
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