25% of Mortgages Underwater
Image via Wikipedia
As the housing market continues to drag its feet toward recovery, there is increasing concern about the number of mortgages underwater. CNN Money reports on the number of homes that are suffering from negative equity:
Almost 10.7 million U.S. mortgages were “underwater” as of September, said research firm First American CoreLogic.
Another 2.3 million homeowners are within 5% of negative territory, the report said. The two figures combined comprise almost 28% of all residential properties with mortgages.
Negative equity is when a homeowner owes more on a home than its market value. This has been a common feature of the mortgage market crisis and the financial meltdown. Many people are finding that their home values have dropped. This is making it difficult for some to refinance — or even to get a loan modification. However, it is important to note that negative equity does not automatically mean foreclosure.
For those who plan to stay in their homes for a while, and who are in a relatively stable financial situation, negative equity isn’t necessarily the end of the world. As long as you can afford your mortgage payments, then you are not in danger of losing your home. You may not be able to refinance, but you will not fall into foreclosure as long as you keep up with your payments. And, if you keep it up, chances are that eventually home values will recover and you will be back in the black with your mortgage.
If you lose your job, however, or if you need to move in the next couple of years, this might not be an option. Instead, you may have to consider selling (possibly a short sale) or even a strategic default. Carefully consider your options. If you can manage to stay put — keeping in mind that your primary residence is a large purchase, and not necessarily an investment — you might be able to weather this downcycle.
![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_e.png?x-id=20c29f0a-7fd6-4012-b002-2e6d3930914f)
[...] and showed that home prices rose in the 3rd quarter. This could be good news for those whose homes are underwater, as the improving home prices would help alleviate the issues concerned with negative [...]
[...] 25% of Mortgages Underwater Image via Wikipedia As the housing market continues to drag its feet toward recovery, there is increasing concern about the number of mortgages underwater. CNN Money reports on the number of homes that are suffering from negative equity: Almost 10.7 million U.S. mortgages were “underwater” as of September, said research firm First American CoreLogic. Another 2.3 million homeowners [...] [...]
[...] news that 25% of mortgages are underwater is not particularly surprising to many people. Indeed, with home values so low, it is to be [...]