The shock of receiving a notice that your home is being foreclosed is an emotional shock.\u00a0 You may feel angry, sad or depressed.\u00a0 A homeowner must put those emotions aside and accept that they need to take stock in their financial situation.\u00a0 In making the final decision to keep or let your home go you must look at several factors in a practical way.<\/p>\n
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First, you must determine if you have equity in your home<\/strong>.\u00a0 Chances are when you bought your home it was worth more than you borrowed.\u00a0 With the downturn in the economy due to frivolous lending, failing business, inflation on other goods, unemployment and homeowners unable to make their monthly payments home values have continued to decrease.<\/p>\n <\/p>\n How do you determine home values?<\/p>\n Generally, the value of your home is based on the value that other houses in your area have sold for.\u00a0 A couple good resources to determine the value of your home include:<\/p>\n www.zillow.com<\/a> & www.housevalues.com<\/a><\/p>\n <\/p>\n Due to the rise in foreclosures home values have plummeted.\u00a0 Vacant homes decrease the value of surrounding homes, foreclosed homes sell for substantially less because banks do not want to sit on homes, and as these homes sit they further decrease in value.<\/p>\n <\/p>\n Determine your equity<\/p>\n Take the market value of your home.<\/p>\n Determine the cost of selling your home<\/p>\n Take the amount you owe on your mortgage and any other liens on the property.<\/p>\n <\/p>\n The equity in your home is the market value minus the cost of selling and amount owed.<\/p>\n <\/p>\n Second, consider if you can make your monthly payments.\u00a0 As a general rule based on the government you should not pay more than 31% of your gross monthly income on mortgage.\u00a0 That is a generous number, it should be more like 25%.<\/p>\n To calculate how much you can afford use an online mortgage calculator to see how much mortgage you would qualify for right now.\u00a0 This will take into account your income and other debts.\u00a0 If it is less than your mortgage now, you may want to consider letting your home go or a reorganization plan through Chapter 13 bankruptcy.<\/p>\n <\/p>\n Third, create a budget.\u00a0 Take an inventory of all your monthly expenses.\u00a0 Look for area in which you can cut spending.\u00a0 If the numbers don\u2019t add up letting go or a Chapter 13 may be favorable.<\/p>\n <\/p>\n Need more help?<\/p>\n When you file for bankruptcy you complete a credit counseling class.\u00a0 These are administered by agencies that will provide information about budgeting and other useful financial information.<\/p>\n <\/p>\n 3 Ways to Reduce Your Debts<\/p>\n <\/p>\n Overall, if you have some equity in your home, or are able to continue making your mortgage payments you may consider keeping your home.\u00a0 On the other hand, if you are severely upside down on your mortgage or your home is worth significantly less that you paid for it you may consider letting it go.<\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" The shock of receiving a notice that your home is being foreclosed is an emotional shock.\u00a0 You may feel angry, sad or depressed.\u00a0 A homeowner must put those emotions aside and accept that they need to take stock in their … Continue reading \n