The Chicago Tribune just reported that 10.9 million Americans are upside down on their mortgage. This means that their mortgage on the home is for more than the property is actually worth. This is something that can commonly happen with a car loan however it can be devastating when it happens with your mortgage.
For someone who is upside down on their mortgage the solutions may feel impossible. Do you stay and pay monthly for a property that isn’t worth what you owe on it or do you walk away and accept foreclosure.
A foreclosure attorney in Chicago will tell you that whatever you do it is important to totally understand all of your options before deciding what to do.
A family can be very attached to the home they live in. The idea of leaving that home can be far more stressful than being upside down on it. Providing that the home doesn’t have any major renovations necessary such as a new roof then it can make sense to stay for a little while. If you can manage to pay the mortgage then continuing to do so might be the right choice for you. The Chicago Tribune reported that it is important to remember that if your home decreased in value and you plan to stay in the home, you need to have your value assessed by the town because your property taxes may be reduced.
Deciding to walk away from the home is essentially asking for foreclosure in Chicago. If you are considering this option consider the effects the choice will have on your credit score as well was what your plans are for the future. If you do choose this option make sure you stay in the home and continue to maintain it, pay taxes and utilities until you are officially foreclosed upon. Until the bank takes the house back you are responsible for the house and it’s associated costs.
If these solutions seem to cut and dry there may be another option that could work for you.
If you wish to keep your home but need something to change financially then look into your options for refinancing or obtaining a loan modification. Interest rates are at a record low which could make refinancing a great option. Depending on when you bought you could save a significant amount of money by refinancing with a lower rate. Loan modification can also be successful at lowering your payments. When you qualify for loan modification your lender often agrees to lower or fix your interest rate or decrease your payment. It is unlikely that they will reduce your principal balance so you would still be upside down on your home.
Another option to keep your home might be chapter 13 in Chicago. Chapter 13 bankruptcy would allow you to pay down your debts interest free for a few years. Once the payment plan has been completed some debts would be discharged but assets like your home can be kept.
Suburban Legal Group
The content found on the Chang & Carlin site is not legal advice and is purely for informational purposes. The information contained herein is not a substitute for the advice of an attorney and does not create an attorney-client relationship. If you are interested in obtaining information about chapter 7 bankruptcy, chapter 13 bankruptcy, foreclosure services, real estate legal services, you are encouraged to call our law firm at 1-847-843-8600 Request a Free Legal Evaluation. Suburban Legal Group serves clients in Chicago, Schaumburg, Joliet, Warrenville, Waukegan, Illinois.