Divorce & Real Estate: Distinguishing Mortgage Balance from Mortgage Payoff
Calculating equity can be tricky, especially with a shifting market. It usually starts with the presumed fair market value minus the presumed mortgage balance. There are hidden factors that can impact your equity, and one of the most frequently overlooked culprits is the deferred principal balance. These deferred balances can amount to tens of thousands of dollars, significantly impacting or even completely eroding your equity.
Deferred principal balances primarily arose out of loan modifications during both the 2008 market crash and forbearances during the pandemic, but they can also exist at any time due to an accumulation of delinquent mortgage payments as a result of financial strain.
Keep in mind: The actual payoff balance is a different figure than the mortgage balance, so these deferments often do not show up on a mortgage statement. That’s why a payoff should be ordered; it will show the exact to-the-penny amount that’s owed.
Before you venture into dividing equity or making decisions contingent on fees extracted from your property's equity, it's wise to pose three pivotal questions:
Have you ever been late on your mortgage payment?
Have you ever done a loan modification?
Have you ever done a forbearance?
For an accurate evaluation of your equity, you will also need an estimated home valuation and a comprehensive title report to uncover any liens, judgments, or encumbrances that can impact your net equity.
Should you need assistance, please feel free to reach out anytime – I have the resources available to assist you. Your comprehensive understanding of your home's equity is vital to making informed financial decisions.
If you have questions and/or wish to schedule an appointment to discuss how Shannon Lindstrom can help you, please call, text or email her at your earliest convenience.
Shannon Lindstrom, Realtor®, CDRE™, MILRES, MRP, VCA
RE/MAX Results
Direct: 612-616-9714
Lindstrom_S@msn.com
Shannon@ShannonLindstromRealtor.com
www.ShannonLindstromRealtor.com
www.ShannonLindstrom.info
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