Foreclosing on your home requires serious consideration for any homeowner. Besides the emotional strain, homeowners must also look at the economic considerations involved in possibly foreclosing on their home.
Before making any decision, ask yourself this:
Do I have equity in my house?
This is a highly important question for any homeowner considering foreclosure. To find out what your home is worth, enter your address at www.zillow.com, www.trulia.com, or similar property value estimate websites.
If your home is worth at least as much as you owe on it, foreclosure may not be your best option.
Furthermore, ask yourself:
Can I make my monthly house payments?
An old rule of thumb is that a homeowner should not pay more than 25% of their gross income for shelter. If your mortgage payment exceeds 25% of your gross income, you may need to evaluate whether this is sustainable for the future.
There are also online calculators that, while imperfect, can give you an idea of how much house you can afford. Google “home affordability calculators” and choose the best one for you. Or ask a budget counseling agency to look over your income and expenses to help you determine whether you can afford your monthly payments.
For more information, contact us today.