If the value of a Tennessee home takes a downward spiral, it can cause equity problems for the owner. Negative equity is a real estate term referring to the value of a house that is less than the homeowner’s existing equity. In short, negative equity occurs when a homeowner owes more on his or her mortgage loan than his or her house is worth. This is one of the most common issues that often lead to foreclosure.
Inability to meet mortgage payments
Falling behind on mortgage payments is something that happens to plenty of people, especially if they face a crisis situation, such as an unexpected death, medical emergency or a divorce. Missing one or even two payments might be a resolvable issue. However, when lenders determine that a loan has become delinquent, they may take steps to activate the foreclosure process.
Foreclosure can be emotionally and financially traumatic
A home is typically the average adult’s largest asset. Receiving notice by mail that a foreclosure is taking place can be devastating, especially for families with children. It can also intensify an existing financial crisis because homeowners must find somewhere else to live. Having to leave behind a home that is loved can be emotionally upsetting, as well.
Keep these helpful tips in mind to avoid foreclosure
A Tennessee homeowner might be able to avoid foreclosure by addressing financial problems as soon as they arise. Some people are able to generate supplemental income to acquire much-needed funds to make a mortgage payment. Others are able to get things back on track by making purchases with cash instead of credit. Filing for bankruptcy is also often a viable option, which can automatically halt a foreclosure process.
