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Are You Under Water on Your Albuquerque Home Mortgage?

An underwater mortgage occurs when an Albuquerque homeowner owes more on their mortgage than what the house is worth. This was particularly common in the late 2000s after housing prices dropped significantly. The home values of many homeowners plummeted quickly and drastically.

The real estate sector has made a remarkable recovery from its prior situation; however, there remain certain areas in the US wherein homeowners still owe more on their mortgage loan than their home is worth.

Unfortunately, it’s not uncommon for homeowners to find themselves in a situation where they owe more on their home than it’s worth. It’s a financial situation that no one wants to be in but is unfortunately becoming more common.

It’s possible that a couple of years ago, you got a mortgage for $200,000 and that amount was manageable. Unfortunately, due to certain unforeseen circumstances, your home value dropped to around $180,000. Nevertheless, your outstanding mortgage is still the same at $200,000.

Your mortgage would be $20,000 more than the value of your home.

An underwater mortgage is also referred to as being upside-down.

Are You Underwater?

If you’re concerned you could be underwater, there are some steps you can take to figure it out. First, determine what you still owe on your mortgage.

With the current economic conditions, it’s important to understand where you stand with your mortgage. Determining if you are underwater on your mortgage can be difficult and intimidating, but there are steps that you can take to figure it out. First, by understanding how much is still owed on your mortgage, you can gain a better understanding of your current financial situation.

To get an idea of the value of your house, it’s recommended to speak with a real estate agent. For a more detailed estimation, hiring an appraiser is likely your best option.

From there, you’ll subtract what you owe from the current value.

So, what can you do if you find out you are underwater?

Options for an Underwater Mortgage

It can be quite frightening to realize you owe more than your house is worth, however, there are several options that could be considered. One of the most straightforward solutions is to remain in your home and work towards building equity. Despite it being a gradual process, there are measures you can take in order to pay off the debt.

Higher principal payments lead to better financial freedom, so even if you struggle with money, don’t default on your payments. Doing so will only make your situation worse and it’s not worth the risks. Paying off even a little bit of the principal each month goes a long way towards improving your overall financial situation.

Another option is to refinance. However, you can’t refinance when you owe more than it’s worth. It would help if you had at least 20% equity in your home for most lenders to consider you for refinancing.

If you’re underwater, though, you might qualify for HARP. HARP was created in response to the 2008 housing crisis.

To be eligible for HARP, you must have been making mortgage payments regularly over the past six months and no more than one late payment in the last year. Additionally, your loan must be issued before 31st May 2009 with less than 20% equity.

If you find yourself in an underwater mortgage situation, the third option is to sell your home. This means you will have to make up the difference between what you owe and what the house is worth. Selling your home could involve losing money, so it is important to have adequate cash reserves ready.

This isn’t a great option, and it should only be a consideration if you absolutely have to sell your house for some reason.

Another option to consider is a short sale. This occurs when you’re unable to make mortgage payments and your home’s value is lower than the remaining loan balance. In this situation, lenders may agree to let you sell for less than what’s owed on it. Lenders don’t like this because they lose money, and they’re only going to offer this option as a last resort.

A short sale of your home is possible if you can prove to the lender that you are not able to keep up with mortgage payments and have no means of catching up.

The absolute worst thing that can be done in an upside-down loan situation is a foreclosure. This would mean that you’d be evicted if you still stay in the home and have it taken away from you. Therefore, it’s highly recommended to find other alternatives before resorting to this option. It would help if you tried everything else before going this route because you’ll lose your home, and you will usually have to wait seven years to get another mortgage.


1542 Rosalba Street NE
Albuquerque, NM 87112

Nestled in the foothills, backing to open space, this beautiful 4BDR/3 FULL BATH/3CG has incredible views of the Sandia Mtns! One bdr/bath or office/exercise room on the main level! Two living areas w/cozy gas fireplaces, formal dining, soaring ceilings, walls of windows, skylights, & balconies w/incredible views! Entertainer’s kitchen w/granite countertops, island/bar, pantry, gas cooktop, built -in wall oven & wine rack. Master suite features a balcony, walk-in closet, jetted tub, sep shower & separate office/study! Stargaze in the hot tub, enjoy your morning coffee with the sunrise, relax in the evenings w/ tranquil sunsets, entertain family & friends in this amazing outdoor living space with open patio, rose bushes, honeysuckle, fig & ash trees, easy care turf!

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Albuquerque New Mexico Real Estate YOUR SOURCE FOR ALBUQUERQUE REAL ESTATE! Sandi Pressley offers unparalleled service to ALL clients in Albuquerque and surrounding communities in the New Mexico real estate market. Sandi's motto is "Putting You First." Your complete satisfaction with our service and representation is our number one priority. As a native of Albuquerque, Sandi Pressley has been dedicated to serving her client's real estate needs for over 43 years. Sandi has achieved a goal unprecedented by any other Realtor of being the #1 Top Producing Realtor for 36 consecutive years in all of Albuquerque as well as the entire state of New Mexico. She is also the #1 Top Producing Realtor for the entire Western Region and 8th in the Nation with Coldwell Banker National. Sandi Pressley serves the entire Albuquerque New Mexico real estate market including the surrounding communities such as Rio Rancho, Placitas, Corrales, Bernalillo, Northeast Heights, North Albuquerque Acres, Sandia Heights, High Desert, Foothills, Four Hills, UNM, Nob Hill, Ridgecrest area, Uptown area, North Valley, Northwest Heights, Paradise Hills, South Valley, Southwest Heights, Bosque Farms, Los Lunas, Cedar Crest, Tijeras, and all East Mountain areas. Whether you are considering buying a home, selling a home or both, we know these areas inside and out.

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