Written by Priority Lending LLC on . Posted in General.
Residents who share homeownership with their banks often wonder what would happen if the housing market were to crash. Would it leave them in debt or without a home?
Priority Lending LLC includes some of thebest mortgage brokers in Tuscon, AZ, willing to offer advice on what happens in these seemingly hopeless times. Also, we’ll explain how to track where the housing market is heading and how to protect your greatest investment.
Do Mortgages Remain the Same During Housing Market Crashes?
Recessions and housing market crashes may cause your house’s value to decrease. However, your set mortgage rates won’t lower, meaning your monthly payments will be higher than your home’s worth. While many may dip into their savings to help pay the steep bills, others may need outside assistance.
What Should I Do if I Can’t Afford Mortgage Payments?
During these hardships, ask your mortgage provider about forbearance, allowing a temporary alternate payment plan to reduce monthly costs. Some lenders suspend payments to prevent foreclosure, but you’ll have to make up the amount later. Also, foreclosure relief deters repossession from backed mortgages during economic hardships.
Even if these aren’t an option, a housing market crash affects an entire region of residents. Therefore, there’s likely a government plan to keep you from wondering, “what happens to my mortgage if the housing market crashes?” As with the pandemic, new government measures offer relief from high payment costs and foreclosure.
Refinancing is a final option in a poor real estate market. By replacing your old mortgage loan with a new one during a recession, you’re opting for lower interest rates that’ll minimize your monthly payments and mortgage costs. However, you must have a good credit score, credit history, steady income, and no outstanding debt.
What Causes Housing Prices to Rise?
Many options are available to homeowners to keep them from wondering, “what happens to my mortgage if the housing market crashes?” However, most residents prefer to save rather than borrow funds or refinance. If you’re one of them, budget to create an emergency fund before you notice the following signs housing prices are declining during a housing market crash:
- Risinghousing prices cause down payments and mortgage rates to seem unaffordable to many with unwavering wage earnings.
- Inflation equals higher interest rates, making loans more expensive.
- A shortage of homes in a high-demand economy causes higher housing prices.
- Higher foreclosure activity lowers housing values.
Protection During a Recession Means Choosing the Right Lenders Now!
When disaster strikes, you need lenders that’ll understand your strife and the current state of the economy. While most are reluctant to lower or suspend payments, our sympathetic team has over 25 years of experience helping homebuyers find and keep the perfect home.If you live in Tuscon, AZ, or surrounding areas and want to know, “what happens to my mortgage if the housing market crashes?” ask Priority Lending LLC. We answer your questions, help you work through highermortgage rates and inflation, and assist with pre-approvals. Call 520-531-1119 for a free consultation today!
