Home Underwater? Four Steps You Can Take to Improve Your Situation

Is Your Home Underwater?

Unfortunately, many people are still suffering from the housing market crash that began in 2006. It’s particularly painful if you owe more on your mortgage than your house is worth. You’re not alone – nearly one out of every five mortgages is underwater – but that doesn’t make it any less painful.

If you find yourself underwater on your mortgage, here are several options. Please contact our real estate attorneys today to learn more!

1. Ride out the storm

Many people panic when they find out that their home is underwater – but the situation doesn’t always demand action. If you can make the payments and you’re happy with your house (aside from its current valuation), staying put may actually be your best option. This allows you to avoid the stress and expense of moving or modifying your loan, and over time the value of your home is likely to increase.

2. Request a short sale

If you have to move or if you’re having trouble making your payments, you can request a short sale from your lender. With a short sale, the lender agrees to accept less than you owe as payment on the property and forgive the remainder of the debt. Lenders are typically only going to do this if you have already defaulted on the loan,. A short sale is a complicated process that requires the assistance of a lawyer and a real estate agent. A short sale will have a negative impact on your credit, so it’s not something to undertake lightly. Please contact us today to discuss this process further.

3. Rent out your home

Renting your home can be a challenge, but it presents a viable option in some circumstances – especially if you are unable to sell the home but can’t afford to keep making your payments. You’ll need a new insurance policy on the property, and you may need someone to manage the property. Ideally, the rental amount you receive should cover property management fees, your monthly payment, insurance, and taxes. Again, this is a complicated process, so don’t hesitate to contact our team if you’d like to learn more!

4. Refinance

There are a variety of government programs that may be helpful. One is the Home Affordable Refinance Program (HARP). If you’re current on your house payments but underwater, you may be eligible to refinance through this program. Your current mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae, and it must’ve been sold to Freddie Mac or Fannie Mae on or before May 31, 2009.

Refinancing through the Federal Housing Administration is also a possibility. You need to be current on house payments and the mortgage must have been endorsed on or before May 31, 2009.

We can help you make sense of this process!

If you’re behind on your mortgage, we understand the stress that you are under, and we want to help. Please contact us today to discuss your options. We look forward to helping you get your finances back in order!