How To Get Out Of Your Mortgage Legally
There are many ways to get out of your mortgage legally. What’s more, getting out of a home mortgage may not be as time-consuming or difficult as you may think. For example, you might be able to get out of your mortgage using one of the following options.
Talk To Your Lender
Homeowners who find themselves under financial duress are advised to speak with their lender as soon as possible. Your financial provider can often offer ideas, suggestions and support to help you through times of financial hardship.
Sell Your Home
Listing your home for sale and finding a buyer for it can help provide needed funds with which to pay off the remainder of your home mortgage loan. If you have enough home equity to pay off your remaining mortgage balance this is the simplest solution to getting out of your mortgage.
Request A Deed In Lieu Of Foreclosure
A deed in lieu of foreclosure arrangement can help stave off more serious financial hardship. Under its terms, you’ll give your mortgage lender the deed to your home, releasing you from your mortgage responsibilities and avoiding having a foreclosure appear on your credit report. While a deed in lieu of foreclosure also shows up on your credit report, lenders don’t consider it as serious as foreclosure.
Have A Short Sale
Short sales happen in real estate when homeowners facing financial hardship agree with their lender to sell a home for less than they owe on the mortgage. If you initiate a short sale, your lender receives all proceeds of the sale. Your lender will then either forgive the remaining balance or arrange for you to make later repayment through a deficiency judgment.
Let Your House Go Into Foreclosure
If you’re unable to make your mortgage payments, your lender can pursue a legal process known as foreclosure. If your lender forecloses on your home, they take ownership and can sell the property. Be warned – foreclosure can severely damage your credit history.
Strategic Default
A strategic default, also known as a voluntary default or simply walking away, occurs when a borrower opts to stop paying their mortgage. Typically, this happens when the property’s market value falls way below the amount owed on the mortgage.
Although it can free you from your mortgage obligations, it is only to be used as a last resort. Those who use this strategy can expect to take a serious hit to their credit rating.
