Upside Down Mortgage: Sell?

October 7, 2008 at 11:00 am Leave a comment

In today’s housing market, it is entirely possible that homeowners who purchased at the peak of the housing bubble currently owe more on their home than the home’s actual value on the open market. There are other factors that could lead to a home being worth less than owed – if its badly run down or in need of major repairs, for example.

Property usually increases with time, but the markets are going to need to stabilize in many areas before homes bought during the housing bubble see an increase in property value.

One way to sell house when the actual value is less than the current amount owed is to transfer the homes deed for a small fee from a buyer. The hope is that they’ll pick up the part of the balance on the home and relieve the original borrower out of the repayment contract.

Selling a home when the homeowner is in a period of upside mortgage sounds like a last resort, but it’s up to the individual. Anyone considering selling a property in this delicate situation will likely want to connect with a real estate agent to figure out if selling in the current market is really the best option. The alternative and preferred method of selling the house would be, of course, to hold on to the property for a few years and hope the sale of the home will bring you a profit.

Considering a mortgage refinance if you’re upside down? Do the math and find out how much you can afford on a refi by using an online mortgage calculator.

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Entry filed under: Home Appraisal, Home Values, Sell Your House. Tags: , , , , .

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