It goes by many names: underwater, upside down, sideways – whatever you call it it’s no good. When you owe more than the property is worth you may have to walk away, but there is always another option. A second mortgage can help pull you out of the debt bubble and help save your home from foreclosure, but you’ll need to be very careful about how you proceed. Here we’re going to go over a few things that you can do; from refinancing to staying and paying until the troubles are over, there is always a way to save your home.
Refinancing with Second Mortgages and Modifications
Refinancing with a second mortgage is almost always an option, but if you just can’t do it you can always look at loan modifications. These can be tricky and you might need a lawyer to get the job done right, but you’ll be able to see if you at least have the chance to work with your lender to save your home.
Staying and Paying Your Mortgage
You’d be surprised at how much a lender wants you to stay in your home and keep paying your mortgage down. IF you walk they have to pay the property taxes, maintenance, and then they have to hope that they can find someone to take this “distressed” property off their hands. The more they can get you to stay in your home the better.
Walking on Your Home
You can always walk, but it’s important to say that if you’re underwater walking away from your home may not cover everything you owe. You could still be liable for any negative equity that remains, or however much you owe minus the sale price of the home. This is why it’s just so so so important to make sure that you don’t let your home get to this point. Refinancing can help you at least mitigate how much you owe to the point where when you DO walk on your property you won’t have to pay the excess.
You could always declare bankruptcy in a last ditch attempt to save your home. It won’t completely wipe out your mortgage debt, but it can wipe out some of your other debts and give you the time and resources to pay off what you owe. You could catch up on a few years of payments and save on interest, but it will all depend on how your mortgage and bankruptcy are structured.
You’ll still have to keep paying on your mortgage, but you’ll want to talk to your lawyer. Don’t wait until it’s too late, talk to someone now and find out what the best avenue is to take for your case.
There are many ways that you can save an underwater home – making bankruptcy and walking on your home last resort efforts. Speak with a lawyer, consider staying and trying to work things out with your lawyer.