Reports today indicate that almost 25% of mortgages are under water. What does that mean? It means that if you wanted to sell your house today, you would have to write a check at the closing table.
What does it really mean to you? Well, that depends on you. Have you owned your home for a while? Are you weathering the recession? Do you have a driving need to move?
If you have owned your home for a while and have not refinance, there is a good chance you are not “under water”. While your home may have lost value, perhaps a significant amount, but that doesn’t necessarily spell disaster. The housing market went through this back in the early 80′s. Then, things turned around and soon homes were valued higher than ever. And, in the 80′s, mortgage rates were at all time highs. Nothing like the lows we have seen for the last decade.
If you are weathering the recession, and are still able to make your payments, it probably means even less to you. Unless the housing market takes another significant downward turn, you can probably continue to hold onto your home and soon “Under Water” will only refer to your fish tank. All of the signs today are that history is repeating itself and that you will once again be in control of your own destiny and your most significant investment, your home, will continue to be there for you and the future of your family.
It is only if you have a driving need to move that you have to worry. If you are under water and need to move, you have a more difficult path in front of you. We would recommend several things for you to think about. Nobody wants to consider giving up their home. However, if you must, is there a way to do it gracefully?
Can you rent your home? While it is not necessarily the ideal solution for you personally, it may be the right solution for you financially. Houses for Rent are still sought after by the general public. Perhaps you can rent yours for a year, or two, while you resolve the issues that are causing you the stress bringing you to this point. It could be a great way to relieve yourself of your current burdens and to allow yourself some breathing room.
Perhaps you are in a situation where you know you must give up your home permanently. If so, maybe making your home available as a Rent to Own Home is a better solution for you. You can make your mortgage payment until your prospective buyer is ready to finance the home themselves. Rent to Own buyers will take very good care of a home that they intend to buy. If for some reason, a couple of years down the road they cannot but, maybe things will have changed for you.
What ever you do. Take a look at your options. Try multiple solutions before you just walk away from your home. It really is still the great investment it was when you bought it.