What Happens When There is Not Enough Equity
I meet many homeowners who are frustrated because they have lost equity in their homes and are now upside down where they owe much more than the home is worth. The repeated story I hear is that they had been planning to purchase a larger home but got caught up in the real estate slump.
I started working with one family who had purchaed their townhouse three years ago. They had a two year old and then had twins. The mother-in-law came to live with them to help with the kids. So you can imagine how quickly their townhouse became too small.
Their problem, though, was that their home was now worth less than they paid so they couldn't sell it and move up. They met with their real estate agent to see what options they had..if any.
The Solution
Because their real estate had already been working with me, he realized that the best solution to help this family was to met them on the Money Merge Account (MMA) Program. We all sat down together to review the situation.
They had a mortgage for $249,500 but their home was now only valued at $238,000. After reviewing their numbers with them, we found that through the mortgage accelaration capability of the MMA, they could increase their equity by about $15,000 in the first year and by $32,500 by the second year. And it's possible that they will get some increased additional equity through market movement.
What makes my heart go out to them is that if they could have gotten on the MMA when they first purchased their home, they already could have enought equity built up. But that is water under the bridge. They were just so greatful to know that they had a solution.
While this is not a quick solution, they were really happy that their real estate agent introduced them to me. When the time is right, they will go to him to not only list their townhouse, but to also begin looking for their move up home. I call this a win-win all the way around!
And another side benefit to this story is that because the real estate agent took the time to work with this family and help them find a solution, they referred their uncle to him who was looking for a home. Another win!
Call me at 301-526-9548 or email me at karyn@bank4yourself.com to learn more about how you can use the MMA program with your clients.
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