Home Equity – Foreclosure Often Not Necessary in Current Market

Written by Charles Essmeier

While driving around your community, you may have seen signs posted on telephone poles that offer “foreclosure help.” These seemingly generous offers to help financially troubled homeowners who are in danger of losing their homes to foreclosure are actually scams. Typically,repparttar “help” comes inrepparttar 150293 form of an offer to buyrepparttar 150294 home for a reduced price fromrepparttar 150295 homeowner. The scammer offers to pay offrepparttar 150296 homeowner’s existing debt and to rentrepparttar 150297 home back torepparttar 150298 homeowner until they can afford to buyrepparttar 150299 home back. The scam comes afterrepparttar 150300 owner signsrepparttar 150301 paperwork andrepparttar 150302 offer to rentrepparttar 150303 home to them abruptly disappears, leavingrepparttar 150304 scammer with an inexpensive house andrepparttar 150305 homeowner without a house or a place to live. Fortunately,repparttar 150306 current booming real estate market has made it possible for financially troubled homeowners to avoid foreclosure on their home andrepparttar 150307 scammers.

Foreclosure usually occurs after a homeowner fails to make his or her mortgage payments for a period of several consecutive months. Lenders are often willing to accommodate minor financial troubles from their borrowers, but sometimes, they have no choice but to evictrepparttar 150308 homeowner and sellrepparttar 150309 home. This is usually done at a public auction, as lenders place more importance on getting money back quickly than in gettingrepparttar 150310 highest pricerepparttar 150311 property can yield. Whilerepparttar 150312 national foreclosure rate has been fairly steady, it has been increasing in several states, notably Texas and Florida.

Home Equity – Don’t Spend it on Risky Investments

Written by Charles Essmeier

The housing market has exploded inrepparttar last five years, and homeowners are finding thatrepparttar 150292 equity in their homes is greater than it has ever been. The equity in a home isrepparttar 150293 difference betweenrepparttar 150294 market value ofrepparttar 150295 home andrepparttar 150296 amount still owed on it. As home prices increase, so doesrepparttar 150297 equity for those who own their homes. In parts of California, home values have tripled duringrepparttar 150298 last five years, and homeowners are doing increasingly risky things with their newfound “wealth.” Anyone considering borrowing against their home’s equity should carefully considerrepparttar 150299 possible pitfalls of doing so.

Traditionally, most home equity lending was done for purposes of home additions or remodels. These have been considered low-risk loans, asrepparttar 150300 house is collateral for a loan that improvesrepparttar 150301 house itself. As a bonus,repparttar 150302 improvement usually increasesrepparttar 150303 value ofrepparttar 150304 home, makingrepparttar 150305 loan even safer forrepparttar 150306 lending company. Occasionally, homeowners default on such loans, butrepparttar 150307 foreclosed property can easily be sold to recouprepparttar 150308 loss. Times have changed, and many, if not most, home equity borrowers are now usingrepparttar 150309 money for different, and riskier purposes.

Thousands of people who have suddenly found themselves with hundreds of thousands of dollars of equity in their homes are treating that value as a windfall of cash. Instead of traditional uses, such as home improvements, borrowers are using their equity to buy more real estate to use as rental property. There are cases of individuals with homes valued at several hundred thousand dollars who have borrowed against

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