Good News For Some Worried About Foreclosure

Florida homeowners once again have equity in their homes as home prices have gradually inched upward.

This is good news for those homeowners potentially facing foreclosure due to high-interest mortgage loans. Positive equity means these homeowners can qualify for more affordable mortgages with better interest rates.

This doesn’t mean that these homeowners have a huge amount of equity, but enough that they are no longer considered underwater. The latest negative equity report from Zillow shows that about 37 percent of homeowners in the Miami-Fort Lauderdale area are underwater, which means these homeowners owe more on their homes than the current worth of these homes.

Miami Underwater Rate

Zillow puts out these reports every quarter, calculating the estimated value of a home to all outstanding mortgage debt and lines of credit on homes nationally down to the zip code level.

However, Florida remains high on the list of states with underwater mortgages. The Miami underwater rate was higher than the national average of 25.4 percent of homes that were underwater in the first quarter of 2013. The percentage of underwater homeowners in the Miami-Fort Lauderdale area has gone down nearly half (48.8 percent) from the first quarter of 2012.

What does all this mean?

Some Homeowners Can Refinance

For many homeowners, it may just mean that they can sleep a little better at night, knowing they no longer hold a home loan that’s bigger than their home is worth. Others will be thrilled to be able to refinance for a better mortgage deal since interest rates are still relatively low.

Yet others may be considering putting their home on the market, although some economists are noting that many homeowners still don’t have enough equity to sell their homes. In order to sell, a homeowner should have about 20 percent equity in their homes to provide for real estate commissions and other seller costs that are typically incurred during a home sale.

Remember, we at the Law Offices of Gilbert & Smallman can help you if you are facing foreclosure. We can tell you about your options and rights as a homeowner.