Due to the quick nature of the real estate market and other economic conditions, some may find they owe more on their home than what the property is actually worth. This can be problematic for a multitude of reasons.
What is an underwater home?
When the value of your property falls, yet you still owe the balance of the original loan amount, this is called an underwater mortgage and is sometimes referred to as an upside-down mortgage.
Can you refinance if your house is underwater?
Many mortgage lenders require at least 20 percent equity to be built up before funds can be released, so if you have an underwater mortgage, you won’t be able to refinance the property.
However, if you have an existing mortgage loan that started prior to May 31, 2009, you may qualify for the HARP program which allows you to refinance your house regardless of it’s underwater status.
What are your options if your mortgage is underwater?
If you’d like to start fresh, you may consider selling your home, however you’ll need cash in hand to cover the difference still owed to your mortgage lender.
You may also consider speaking with your lender to conduct a short sell on your home. This would mean they would sell your house for less than what you currently owe, losing them money, so this isn’t the most ideal solution. It’s usually only agreed upon if it’s demonstrated you can no longer make mortgage payments on the property.
Being underwater on your mortgage may feel scary, however, working with your lender, you can map out the best solution to gain stability.
About the Author
Robin Anderson Real Estate
“My Passion is people and relationships and I promise to provide my clients with exceptional service tailored to their individual needs.” -Robin Anderson
Georgia native, Robin Anderson brings her passion for people and her love of homes to work for her clients. She and her husband, Andy, have been married for over 30 years and have two adult children, Ellen and Drew. They currently live in Fulton County, but Robin has lived and invested in properties throughout metro Atlanta as well as helped clients buy and sell. She has been integral to many real estate endeavors including designing and building several custom homes, remodeling homes, subdividing land, managing rental properties, and buying and selling properties. She spent her first 3 years in real estate working with a new home builder, and she has spent the last 6 years working with buyers and sellers in her own community. Robin is highly motivated but sensitive to the fact that buying and selling homes can be an emotional experience, so she makes it a priority to keep clients closely informed throughout the process and strives to produce quick results. She appreciates the opportunity to help her clients navigate the real estate process, and she aspires to deliver quality customer service that is both informative and positive. She is driven to provide outstanding service for her clients and she is focused on building successful and lasting relationships with her clients. This personalized service earns her enthusiastic referrals from clients she is pleased to call friends.Edit
