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How Can I Sell Underwater Home?

questionkeyboard wide How Can I Sell Underwater Home?

Q: Eight years ago I purchased a house for $162,000 which included a $10,000 grant given to me as a down payment. My interest rate was and is now 6 percent. I have not refinanced the house since the original purchase. According to sites such as this one, and what the houses are being sold for in my neighborhood, my house is valued under $60,000 but I still owe double that amount. I need a bigger house for my family and I need to know what are my options? – Ann in Michigan

A: Great questions! Know that you are not alone and there are many homeowners struggling with this very same situation. One option is to bring a big check to closing. Another choice may be a “short sale” – where the bank takes on the cost of the shortfall. You would typically need to have a hardship of some sort (loss of job, medical condition, etc.) that shows you don’t have the ability to afford the home any longer in order for the mortgage company to approve any short sale. A short sale will certainly affect your credit and ability to obtain another mortgage, however. If neither of these two choices work for you, you may try to rent your current home or you may have to stay put for a while. Good luck!

Gina Dumas is a Realtor® with RE/MAX Results in Minneapolis, MN.

A: This is a situation for many people right now and it is happening everywhere, but there are ways to sell your house. The first thing for you to find out is if you have any equity in your house; if there is no equity, one way to sell your house is a short sale, by hiring an experienced Real Estate agent who has done successful short sales in the past. Your agent will be able to either negotiate on your behalf with your lender for less money, or introduce you to a Real Estate attorney to do it for you and you can close on your house with your lender’s approval. However, this process will hurt your credit score and might delay your future home purchase for a while.

Rena Kovach is a Realtor® with Fairfax Realty in Vienna, VA.

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