What is an underwater mortgage?
If you are underwater with your mortgage, it means you owe more for your home than it is worth. It is not a situation in which an owner wishes to be, but it happens to more people than you think! …
By Astoria Contributor
If you are underwater with your mortgage, it means you owe more for your home than it is worth. It is not a situation in which an owner wishes to be, but it happens to more people than you think! If you owe more in your home than it is currently worth, it is easy to feel overwhelmed and stressed. It’s perfectly normal. Just know that there are millions of Americans who have been where you are and who have overcome it. You have options and we will show you the ones we recommend. Here’s everything you need to know about underwater mortgages: what is an underwater mortgage, how do you know if you have one, and what you can do about it?
What is an underwater mortgage?
First, an underwater mortgage is a home loan greater than the current value of the property. It really is that simple. Suppose you bought your house two years ago and owe $300,000 on your mortgage. Everything was fine until the value of homes in your area began to decline. Now his house (where he still owes $300,000) is only worth $285,000.
Your mortgage value is $25,000 more than the value of your home. Because you owe more than your home, your mortgage is considered “underwater.” Sometimes you hear the term “upside-down” to describe an underwater mortgage.
An underwater mortgage is a mortgage loan greater than the current value of the property. Sometimes you hear the term “backward”.
Underwater mortgages became very common after the 2008 housing crisis when property values plummeted and owners of floating-rate mortgages could no longer pay their payments. A decade later, more than 9% of owners are still underwater. It’s much better than it was years ago, but 9% of owners think it’s 4.5 million Americans.
How To Know If You Are Underwater At Home
It is not difficult to know if you have an underwater mortgage. Now take a deep breath and follow these simple steps to determine how much amount you still owe on your mortgage. You can find it in a current mortgage summary or in your online account. If you can’t find it, you can always get this information from the company that owns your mortgage. Find out how much your home is worth. There are many ways to determine the value of your home, but some are more specific than others. If you just want a quote, you can speak to an experienced real estate agent near you. For a more precise number, it is preferable to hire an appraiser.