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What is so bad about being "under water" on your mortgage?
I know that 1 in 4 people owe more on their house then what it's worth but I don't understand how that can be bad if you have a regular mortgage payment (fixed) and you haven't lost your job.
I understand why people who have adjustable rates are upset about it being worth less then they paid but I don't understand what it affects if your still in ok shape financially. I mean, other then not being able to sell your house any time soon, I don't understand.
-NOT a homeowner, btw. Never been through the process, so there may be something I'm totally missing.
3 Answers
- Ed AtunLv 71 decade agoFavorite Answer
You can't sell. If you get a job offer in another state, you have to refuse.
You can't refinance. If rates drop to 3% fixed, you can't get that loan.
You have to wonder if it will get worse. Why keep pouring money into something that is losing value. You could rent a better house for less and stop losing money.
- ?Lv 71 decade ago
These people consider the house an investment and not a home. They discussed this on Squawk Box yesterday. Stay put, enjoy your home and within 10yrs your equity will have grown.
The people with big problems are those that do NOT have fixed mortgages. They opted for Adjustable, Balloons or interest only. Now they are scrambling to find a fixed mortgage but since a lender will not provide a mortgage for more then 80% of the homes value; leaving the homeowner not able to repay the first mortgage. That is why only 10% foreclosure rate. 90% of mortgage holders are Not having problems making their payments
- Anonymous4 years ago
It quite basically turns right into a situation while the economic enterprise forecloses on it or if the owner of a house has to sell. If the owner of a house likes the domicile and keeps up on the money it means no longer something, the value could advance ultimately. by way of the years, actual sources continually will advance because of the fact of inflation. Been a proprietor of a house for two decades. My domicile remains valued for a lot greater effective than what I paid.
