Buried or Underwater….The 5 Things Every Homeowner Should Know About Declining Home Values

Buried or Underwater.The 5 Things Every Homeowner Should Know About Declining Home Values

At least once a week, I get the following phone call: "Hey, Travis, I wanted to talk to you about our house. We really need to sell, but I think we might be in trouble" That call usually signals the beginning of much gnashing of teeth and fretting about how they bought a home in 2005, 2006, or 2007 and now it is worth less than what they paid for it. Sometimes, the home is even worth SIGNIFICANTLY less money than my clients owe.

I won't write an article painting this picture as one with a rainbow at the end. It's serious business to have more debt than value in anything, especially your home. However, this situation does not have to be the financial disaster that most people perceive if it is handled quickly and effectively. There really is light at the end of the tunnel for those who are willing to take some specific steps and follow the advice of their trusted professional advisor.their Realtor!

The following are the five things that I think every homeowner should know about falling values in the housing market:

You are not alone, and your situation is one that has been seen and addressed by professionals many times before. The first thing that many people do when they get into trouble with their mortgage is to try and hide it from the outside world. This is also, coincidentally, the biggest mistake you can make. While we don't want to have friends and neighbors "know your business", we certainly have to be keenly aware of the fact that time is money and money is EVERYTHING in one of these situations. The more quickly you get some good advice and start a plan of action, the better off you will be.

Letting the house "go back to the bank" is a horrible idea. I don't know what the specifics of your situation are, and I really don't need to see them to know that this is NOT the answer. Even the phrasing is a misnomer. The bank never owned the house in the first place so you can't "let it go back". They don't want the house and they never did. They want money. Plain and simple. By giving them the house (through foreclosure), you're basically leaving them with the worst possible of all outcomes, and that is exactly how the foreclosure will reflect on your credit report.

Sometimes the most painful solution in the short term is the most valuable in the long-run. This means that if you have any cash or assets available to pay off the difference in sales price and loan amount, you're probably better off going that route. It sounds appealing to simply allow the bank to "eat" the difference, but in reality, you'll usually pay triple or more of what you walked away from. How so? Well, we live in a credit driven world. You'll get higher rates on your credit cards, the interest on any car loans will be greater, you'll have to put large deposits down for utilities and rental homes, and the list goes on and on.

Click here to read the rest of the article on Pan-Realty.com

By: Travis Everettehttp://www.articlesbase.com/real-estate-articles/buried-or-underwaterthe-5-things-every-homeowner-should-know-about-declining-home-values-4385064.html

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