What To Do if You Think You Owe More Than Your House is Worth
Posted by David Schneider | January 22, 2008

More people are finding themselves in the situation of being “upside down.” That is the term the housing industry uses when they owe more on a home than it is worth. Experts say this is becoming more common with the current affairs of our economy and latest trends in home sales. Unfortunately, most people don’t know how to remedy this problem and are left holding on to a house that isn’t worth what they have put into it.

If You Do Not Need to Sell

Analysts and experts are now advising people that if it isn’t necessary for them to sell, then they should stay in the house and pay down the principal. Try paying more than the minimum monthly payment. Experts agree that the market always bounces back. If you choose to sell later, you will have built in equity by that time.

Making Up the Difference When You Owe More Than Your House is Worth

What if you do need to sell the home now? In that case, you may have to make up the difference. This is one of the least recommended options for people faced with a house that is worth less than they owe. However, some people may fee left without a choice.

The Short Sale Option When You Owe More Than Your House is Worth

A short sale is a viable option for anyone owing more than their house is worth. In the simplest terms, a short sale is when the mortgage company attempts to sell the house for less than what you owe. If you are trying to avoid foreclosure, this is a possibility worth exploring.

However, most realty companies will ask that your house stay on the market for at least 90 days before discussing a short sale. You should also be prepared to prove that a short sale is the only option.

Whichever option you choose, make sure your home is properly appraised first. You should thoroughly check it over and make comparisons with the current market. You may be surprised at the worth of your home. Having your home re-evaluated could mean the difference between losing your shirt and comfortably living out your days.