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Is Financial Stress Bringing You Down?

The United States Bureau of Statistics reports that 8 out of 10 of the largest household expenses increased in 2019. Transportation costs increased by around 10 percent, food expenses increased by 3.1 percent, and housing expenses increased by 2.9 percent.

As the cost of living increases and many households are struggling to recover from the economic impact of COVID-19, financial stress is increasingly common. In fact, according to a study by NEFE and Harris, nearly 90% of respondents said that COVID-19 caused financial strain. Almost 30% of the respondents point to paying for housing and utilities as a primary concern.

If you’re struggling to manage your finances, being able to maintain an investment property or even pay your own mortgage could feel impossible.

While it may feel overwhelming right now, there are a few things you can do.

Get honest with your budget

Sit down and go over your budget—all of it. Print out your credit card and bank statements. Gather any documents for repairs or other expenses to investment properties. Start making notes about where your money is going. Reviewing a month of statements can help clarify where most of your income goes. Consider separating expenses by category, so you know where you can cut back.

Look at all your home and investment property expenses. Are there areas you can cut back, or will reducing costs impact the quality of life for your or your tenants?

Be honest about your property

Are repairs too expensive to manage? Do you always feel like your spending money on one repair after another? If you own investment property, do you have tenants that constantly cause damage to the home? For most people, home expenses rank as their most expensive budgetary item. Constant repairs and updates can quickly eat away at your budget.

Look at the property from an unemotional perspective. Really be honest about whether you can or want to continue investing your time and energy into the house.

Consider your options

Once you have a clear picture of your finances, consider your options. Do you qualify for a refinance or a home equity line of credit? Both options could allow you to keep your property but require a good credit score, a low debt-to-income ratio, and equity in the home. If your property requires many repairs or is worth less than what you owe, you likely won’t qualify for either option. In this case, selling the home or investment property may be the best option to help reduce financial pressure quickly.

Sell wisely

If you decide to sell your property, you have several options. You could sell through the MLS or put your home on the market as a for-sale-by-owner. For many homes, this is the simplest solution. However, if you’re close to foreclosure, the house needs many repairs, or you have tenants living in the property, it could be more complicated and take more time selling through a realtor. Since the housing market is so competitive, if you can sell your home on the traditional market, you may have to move much quicker than you want.

At Brick, we specialize in homes that need extra attention. We work with our clients to ensure that they have the best experience possible. That means we can work with you on your timeline. We’ll make a fair cash offer for your home, so you can move forward with less stress.

If you’re facing financial difficulties, we can help sell your property quickly.

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You could avoid foreclosure

In 2020 more than 4 million homeowners in the United States had their homes in forbearance. Many people struggled to make their mortgage payments each month. In addition, many Americans faced mounting debt and medical bills because of COVID-19. If you cannot keep up with mortgage payments and need to avoid a foreclosure selling your home for cash now could be a beneficial option.

Foreclosures negatively affect your credit score for years and make it difficult to get approval for credit cards. Additionally, you may not be able to buy another home for several years following a foreclosure. Liquidating your home could provide the cash you need to pay off debts and avoid financial issues down the line.

You may be able to sell your home even while it’s in forbearance. If you’re unsure whether liquidating your property is the right choice for you, we’re here to help. We’re happy to answer any questions you have.

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Further Reading

What are my debt options?

If you’re looking for ways to handle your debt and relieve a little stress, here are a few things you can consider:

You Should Know: Deed in Lieu of Foreclosure

The deed in lieu of foreclosure transfers the title of a house from the borrower to the lender. The lender owns the home, and the borrower gets out from under their mortgage. While a deed in lieu of foreclosure will still affect your credit report, it’s often less detrimental than a full foreclosure.

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