In today’s ever-changing real estate market, countless families with homes have lost their equity. In most cases, the property is now worth less than what the homeowner actually owes, which creates negative equity. With a negative equity situation, you would need to pay to sell your home. You’re losing money on the sale.
It is never ideal to sell a home in a negative equity situation. You can take a short sale or simply walk away from the property and undergo foreclosure. A short sale is not a guaranteed sale, however, because the bank has the final say. When you walk away–thereby facing foreclosure, credit trouble, and debt–the situation can quickly worsen.
As such, many homeowners want to know when real estate investors can take over mortgage payments altogether. This is your third option. Sell the house via a mortgage takeover plan. Not many people have heard of this method, however. A mortgage takeover works by having the buyer take over the monthly payments on your behalf. In the end, the house is theirs to keep. The buyer would pick up the remaining payments where you leave off.
To break things down: The old mortgage remains in place on the home, and the new owner will make the monthly payments. However, the buyer is not assuming the liability of the entire mortgage. The buyer is just handling the payments. If for whatever reason they stop paying the monthly mortgage payments, then you are still on the line for the remaining amount. The buyer has no reason to default on the mortgage, though. They own the house once the payments are complete.
Unfortunately, one of the biggest downfalls is that you won’t receive any money for the sale of the house. At the same time, you don’t have to keep paying monthly for an unwanted or overly-expensive property, though.
Your seemingly hopeless situation – one where you may lose your home – now looks much better. You’re out from underneath the mortgage expenses and have new opportunities to explore.