Should I Sell My House With No Equity?
We Can Help Sell Your Chicago House With Low or No Equity!
If you’ve owned your house in Chicago for only a few years, you might be asking yourself, “Should I sell my house without equity?” The good news is that you might still be able to make a profit or at least break even, even if you haven’t owned the house for very long. There are a few things you should think about before making your decision, such as whether or not you’re in a situation to sell your Chicago house and how fast you can sell your home.
How To Calculate Home Equity
To determine home equity, take the value of your home and subtract the amount of money you still owe on it. The result is the amount of ownership or equity you have in your home. For example, if your house is worth $400,000 and you still owe $200,000 in mortgage payments, then you have $200,000 worth of equity in your home.
So, if the number you owe on your home is higher than the current value of your home, you have negative equity. Negative home equity is called an underwater mortgage. Even though negative equity isn’t usually avoidable, it’s important to figure out how you lose equity on your home and ways to deal with negative equity in a house.
What Cause Negative Home Equity?
As a homeowner, you may find yourself in an unexpected situation where you owe more money on your home than its actual value. When a house is worth less than what is owed, it is called negative equity.
Negative equity can occur due to two main reasons: the requirements for borrowing money were too easy, or the housing market has changed. Banks usually don’t lend more than the home’s value, so you might wonder how negative equity can happen.
Market Conditions
When you own a house, the value of your home may go up or down depending on the housing market conditions in your area. If you bought your house when the market was doing well, but home values dropped afterward, you might owe more money on your house than it’s worth.
This is called negative home equity. It’s important to keep an eye on the housing market in your area to know how it might affect your home’s value.
High Interest Loans
When you have a loan with a high-interest rate, a big chunk of your monthly payments will only go towards paying the interest, not the loan. The payments not going towards the interest can become a problem if you’re unable to keep up with the high mortgage payments. That said, you might end up owing more than your home is worth.
Home Needs Major Repair
If your house needs major repairs, it can impact how much it’s worth. It might be worth much less if it’s not in good shape and needs to be updated. It’s a good idea to fix anything that needs repairing and keep the house clean and in good condition. This will help prevent future problems that can be very costly.
Finances
Your personal finances can affect your decision to sell your house. For instance, you might need to sell if the house is too expensive to maintain or if you lost your job and can’t pay your bills, you might need to sell your home. If you need to catch up on payments and need help, selling your house might be the best option to get back on track financially.
How To Get More Information
If you own a house with little to no equity and you’re considering selling, contact us! Getting a quote is free, so there’s no risk involved. We can answer any questions and help you determine if you can sell your house in a low equity situation. We can also recommend whether it’s better to sell to us or to sell it on the traditional market.