The tax credit for existing homeowners is great - you can get up to $6,500 if you are a homeowner who puts a contract in by April 30 on another home, provided you close by July 31. Sounds great! But many homeowners are finding that what they can sell their home for barely covers what they owe on their mortgage. So they can't take advantage of the tax credit. At best, it's a great time to be a landlord - a lot of consumers are turning to renting as an alternative.
Some folks have it worse - they can't even break even. Their home won't sell at a high enough price to cover the mortgage. If you aren't having a problem making the payments, that's not a problem. But in the case of a friend of mine who is facing divorce, they may let their home go into foreclosure. Neither of them can afford to keep the home, and they can't sell it. Such a predicament.
What to do? It depends on your situation. Here's an article from our friends at BALANCE that might give you some insight about preventing foreclosure. And Home and Family Finance offers an article on selling your home in a tough economy, if you do decide to sell.
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