Chattanooga Home Buyer Explains Whether You Can Sell Your House With Negative Equity

When people pay their mortgages on time and boost their property values, their home equity also increases. Unfortunately, situations beyond a homeowner's control can result in negative equity. In such a situation, homeowners may ask, "Can you sell a house with negative equity?"

Chattanooga Property Solutions explores the answer for property owners in Chattanooga, Tennessee, below.

What Does It Mean To Have Negative Equity in Chattanooga?

Negative equity, or an underwater mortgage, occurs when a Chattanooga homeowner owes more on a home loan than the property is worth. If they were to sell their house under such conditions, they wouldn't have enough profit to cover the remaining mortgage balance.

An underwater mortgage can happen in several ways, including:

• Sudden changes in interest rates: Extreme rate changes can affect buyer demand in Chattanooga, having a negative impact on home prices.

• Buying homes at peak prices: If a person buys a home when prices are near their peak and the market cools soon after, it could lead to a drop in property value.

• Low down payment: Those who put little to no money down at purchase won't have much equity in the property. If the value declines even by a small amount, it could lead to negative equity.

How To Handle an Underwater Mortgage During a Chattanooga Home Sale

Unfortunately, mortgage refinancing may not be available to Chattanooga homeowners with an underwater mortgage. Those searching for answers to "Can you sell a house with negative equity?" may benefit from one of the following solutions.

Pay the Mortgage Balance

A loan payoff during a home sale would be easier if a homeowner with negative equity pays the remaining mortgage balance up front. Whatever the sale doesn't cover, they can cover themselves at closing.

Deed in Lieu of Foreclosure

In a deed-in-lieu of foreclosure, the homeowner wouldn't sell their house. Instead, they would sign the deed over to their lender. This action would negatively affect their credit score, but it's less damaging than foreclosure.

Trigger a Short Sale

A short sale may suit those unable to catch up on mortgage payments. The lender would accept less than the property's worth if they agree to a sale. Partners who buy houses in Chattanooga, TN, can help homeowners navigate this option.

About Chattanooga Property Solutions

Can you sell a house with negative equity? Chattanooga Property Solutions handles cash home sales in Chattanooga, Tennessee, for homeowners seeking equity protection and foreclosure avoidance. The local company also offers reliable real estate solutions beyond cash sales, regardless of a property's condition.

For more information, call Chattanooga Property Solutions at (423) 454-3070.

Contact Information:

Chattanooga Property Solutions

5442 Hixson Pike
Hixson, TN 37343
United States

Thomas DeMoss
https://chattanoogapropertysolutions.com