A home loan can be quite a heavy burden to bear–especially if you’re stuck with a high interest rate or mortgage payments that are substantially more than you can afford to pay each month. If you’ve found yourself trapped in a bad home loan and you’re struggling to find a way out, one of the following options just might be the break you’ve been looking for.
How to Get Out of Home Loan
Check Out Your Refinancing Options
If you’re paying high interest on an adjustable rate mortgage, you may want to consider refinancing your loan at a more affordable interest rate. While you may have signed up for a low interest rate at first, an adjustable rate mortgage can change at any time, making it increasingly difficult to chip away at the principle–not to mention keep current on your payments when money is tight.
Ask your mortgage broker what some of your other refinancing options are with your current lender–and if you’re not satisfied with what they can offer you, shop around until you find an interest rate somewhere else that will provide you with some much-needed financial relief.
Put Your Home on the Market
In cases where refinancing won’t make a bad situation good again, it may be time to put your house on the market in an attempt to get out of your home loan. If the amount you owe on your home is equal to or less than what it’s worth, this might be the best option for you. By listing your home with a reputable realtor or putting in on the market yourself, you may eventually be able to walk away free and clear if you receive an offer that will adequately cover what you currently owe on your home loan.
Do a Short Sale
If you owe more on your home than what it’s worth, you might want to cut your losses and opt to do a short sale. The benefit of doing a short sale is that your lender might agree to a buyer’s offer even if it’s much less than what you owe, releasing your from your loan once and for all. The downside, though, is that your lender doesn’t have to accept an offer if they decide that it won’t satisfy your debt–and you have no say in the matter whatsoever.
When All Else Fails, Consider Foreclosure
Sometimes the only way out of a bad home loan is foreclosure–and while it should only be considered when all other options have turned into dead-ends, it’s something to consider when there’s nowhere left to turn. A foreclosure on your home will negatively impact your credit for several years after the fact, but it may be a small price to pay if your home loan is eating up all of your assets or causing you to default on a majority of your other debts.
Before you decide whether foreclosure is the best solution for you, discuss your situation with your lender as well as a financial or legal advisor so that you fully understand everything the foreclosure process entails.
If you feel like your home loan is swallowing you whole, the time to act is now. Carefully consider and examine all of the above options–one of them might be just the ticket you need to free yourself from the bad home loan that’s been pinning you down.