What Are Your Options When You Owe More Than The Home Is Worth?

What Are Your Options When You Owe More Than The Home Is Worth?

In a crazy upside down real estate market and economy, home owners that want to sell or in some case need to sell have found their selves in a very tough predicament. There is a huge population of home owners that are facing some very stressful situations which include, owing drastically more then what the value is on their home, forced to move due to not being able to afford the home, and families that have now out grown their home.

These situations are very common in our current real estate market and with no end insight they are left with some very difficult decisions. Do they walk away from their mortgage payments and reap the repercussions of foreclosure? Do they place the home on the market, wait months and months or even years before decided to take a huge loss on the sale price and bring cash out of pocket at closing? Do they just have to deal with the situation of living in a smaller or larger home that does not meet their change in family size just because they are afraid their home will not sell?

The good news is that everyone still has options. When we go through down markets, homeowners need to get flexible on their home selling options. I am for one not a big fan of walking any from ones mortgage, or taking a huge loss and even just dealing with holding off growth plans. The good news is that there are some very popular and very beneficial options that will allow you to move on with your life, save your credit, money and a ton of stress.

You need not hold off plans of purchasing a new home and or moving on with your life. Renting or renting to own your home is the best and most popular option in these economic times. It is a quick and convenient way to relieve yourself of the monthly mortgage payments allowing you to move on to a new place of your choice. There are other benefits including additional tax write offs, possible additional stream of income if the rent is higher than mortgage, and possible profit when the market returns to normal.

How this works is, the renters or rent to own buyers pay a damage deposit or a non-refundable down payment to the home owner. During the term they pay a fixed amount each month to live in; the amount is dependent upon market rent for the size of your home. If it is a rent to own situation then a part of the monthly rent will be credited towards the down payment or closing costs upon purchase of the property. At the end of a stipulated term for a renter they will either renew the lease or move out, which then the property owner can review the current market and decided to either sell or rent out again until they feel comfortable with selling. Rent to own terms vary from six months to four years, during this time they are usually improving their financial situation or allowing lending markets to loosen up in order to qualify for a mortgage to purchase the home.

This works great for all parties, for the renter or rent to own buyer and the seller. On one end, the rent is a monthly income for the owner, and on the other end in a rent to own situation, a portion of it goes into a down payment making it possible for the tenants to buy the house.

So renting or renting to own their home is the best option for both sellers and tenants/buyers and provide great answers to the common hurdles of selling a home in this real estate market. If the former has bought a new house already and not succeeded in selling their old property, they can be relieved from paying two mortgages, and the latter can own a house faster in a less stressful way. In addition if the home owner needs to down size or upsize their home, they can do so without having to take a huge financial or credit loss.

After weighing all the options on how to move your life forward and still relieve yourself of the heavy burden of the current mortgage payment, you can see why renting or renting to own your home is the very best and wisest option.

Daniel Dawson


  1. Denise Boshers

    looking for homes for rent or rent to own in the 63125 zip code asap. dboshers7@netzero.com

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