Yahoo! News asked homeowners whose property is worth less than what they owe on their mortgage to share their story.
FIRST PERSON | My mortgage has been underwater since the first year we purchased our home. When the housing market started falling, we were absolutely astounded at what seemed to be unusually low house prices in our hometown of Portland, Ore. We jumped at the chance to pay $140,000 for our three-bedroom, one-bath, 880-square-foot fixer-upper. Four years later, we still owe $136,000 on our loan but the property is valued at just $95,000. We are kicking ourselves for not waiting a couple years, but we won't be walking away any time soon. We didn't buy this house to be an investment; we wanted a home to raise our family.
Our job situation has since changed and we would love to take advantage of great interest rates, but we wouldn't qualify even if we weren't underwater. We were young and unprepared for home ownership and wouldn't mind selling and trying again with a smaller, cheaper property. Right now we don't have that option. We've had to tighten our finances -- and then some -- in order to make the payment each month. For us, the house is worth the purchase price for the benefits we have in owning our home instead of renting. We expect our income to increase and when that happens, the monthly mortgage payment won't be a burden even if we cannot ultimately recoup the cost of the home. For all we know, we may live the rest of our lives in this house.
We are encouraged by rising home prices. Our home value has increased from $80,000, to $82,000 and then jumped to $95,000. We expect the value of the home to near the price we paid in the next few years and our employment to stabilize again. We are hopeful when that happens we will be able to refinance to a lower interest rate. It will be nice to have the month run out before the money does and the kids will appreciate more than just beans and rice for dinner!
- Real Estate