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It’s not as easy as just packing up your bags and leaving, but it is possible to do with the right strategy. You need to consider the type of mortgage you have, your current financial situation, and what your goals are for the future.
If you have a fixed-rate mortgage, you may be able to refinance to a lower interest rate and save money each month. If you have an adjustable-rate mortgage, you may be able to sell your home for enough to pay off the loan and walk away with some equity. If you’re struggling to make your mortgage payments, you may be able to get a loan modification to make them more affordable.
No matter what your situation is, it’s important to talk to your lender before you make any decisions. They may be able to work with you to find a solution that’s best for both of you.
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Frequently Asked Questions (FAQs)
Can a homeowner walk away from a mortgage?
Yes, a homeowner can walk away from a mortgage, but there are consequences to doing so. If a homeowner simply stops making payments on their mortgage, they will eventually go into foreclosure. If a homeowner walks away from their mortgage and surrenders the property to the lender, this is known as a strategic default. There are pros and cons to both foreclosure and strategic default, and it’s important to speak with a financial advisor to see which option is best for your individual situation.
What are the consequences of walking away from a mortgage?
If you walk away from your mortgage, you will damage your credit score and likely have difficulty qualifying for future loans. Additionally, your lender may pursue you for the remaining balance of the loan. If you are unable to pay the balance, the lender may foreclose on your home.
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