There’s an image attached to foreclosure that often includes a family walking away from their home with nothing. The home is put up for auction and there’s nothing you can do about it. Fortunately, this isn’t always the case, especially if you have equity in the home. As a homeowner, you have rights when you go through an equitable foreclosure on your home and our team at Claim Surplus will help you fight for them. If you’d like to learn more about what you’re entitled to with an equitable foreclosure, read our short guide below.

What is equitable foreclosure?

Before we get too far into what you’re entitled to an equitable foreclosure, let’s first establish what it is. If your home is worth more than the remaining amount of the mortgage loan, then you have equity in the home. For example, a home that’s been appraised at a value of $400,000 with a remaining mortgage of $300,000 has equity of $100,000. When it comes to an equitable foreclosure, you can prevent foreclosure proceedings because you have equity in the home. You’ll be required to pay off the full amount of the debt, but you can use the equity as a part of that payment.

Equity stays with the homeowner

It doesn’t matter if you’re selling your home or foreclosing, you own the equity in your home. However, the established equity might not be as much as you think is it based on the market. Keep in mind that when you’re going through foreclosure proceedings, the bank or lender will require a current appraisal on your home. This appraisal will likely come back with an amount that’s lower than what you initially anticipated as the value of a home typically drops between 20% and 30% in foreclosure. So, if you had a small amount of equity in your home before your foreclosure appraisal, that will be significantly slashed or go away entirely.

Right of redemption

As we stated above, a foreclosure doesn’t mean that you have to walk away from your home without an opportunity to reclaim it. This is something that’s only true in movies to drive the plot forward. Instead, you have the ability to repay the amount of your debt and reclaim the property. It is your right to claim the property after your foreclosure.

Access to surplus funds

If your home does have remaining equity after the foreclosure appraisal and you have to go through with foreclosure proceedings, you’re entitled to the equity. These are called surplus funds and you can claim them. This is often going to take a fight because your original lender or the new homeowner might be trying to get them as well. To ensure that you’re treated fairly in your battle to obtain these funds, you’ll likely need to hire a lawyer to do the heavy lifting for you.

Reach out to learn more

Don’t wait to get started claiming the surplus funds from your equitable foreclosure. Our team at Claim Surplus is here to help. We’re experts in working with lawyers who will fight for your rights. Get in touch with us by calling 407-759-6226 and we’ll set up an appointment for you to meet with our team. You can also send any questions you have by using our online contact form. We look forward to hearing from you and working for you to get the money you’re entitled to.