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. Here is what you should ask yourself:
(1) 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, put your address in at www.zillow.com, www.housevalue.com, or similar websites.
If your home is worth at least as much as you owe on it, foreclosure may not be your best option. Or you can sell the house and free yourself from the mortgage.
(2) Can you make your monthly 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.
Additionally, 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 one for yourself.
Finally, ask a Budget-Counseling Agency to look over your income and expenses to help determine if you can afford your monthly payments.
For more information, contact Kirkland Foreclosure Attorney.