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6 ways to save your underwater home

What seemed like a housing market downturn is now seen as the new normal.  Many homeowners are taking a tough look at their mortgage situations in this stark light.

Many people wonder whether they should walk away from their underwater houses and upside-down mortgage (mortgage balances higher than the current value of the house).

This decision is very big and very personal with many variables — legal, financial, credit, tax, personal, lifestyle, family, etc. — to give a simple answer.  If you are trying to make this decision now, you should consult with a reputable real estate broker, mortgage broker, local attorney and local tax professional — at a minimum.

That being said, below are six alternatives to walking away.  This information originally appeared here.

1. Get rid of your credit card debt.

This might seem obvious, but many people could afford their mortgage payments if they dealt with their credit card and other debt.  Call your creditors and make an effort to settle your debt; many will take a lump sum payment much lower than your balance.

2. Get a second job.

This seems obvious, too, but I believe it’s simply not done nearly as often as it should be, mostly out of pride and ego.  It won’t last forever and, again, could be very much worth it.

3. Start a side business.

Sites like Etsy, TaskRabbit and elance allow people to monetize their spare time, quirky hobbies and special skills.

4. Rent a room — or two — out.

Put an extra room on Trulia or Craigslist for rent. If you can’t stomach the idea of a permanent roommate, check out Airbnb and see if you can generate some extra cash renting out your rooms to those visiting for short periods of time.

5. Apply for everything.

Do not be deterred by the first roadblock that comes up in seeking a loan modification from your lender.  Instead, apply for everything for which you might possibly qualify, and don’t make assumptions about what programs might work for you (many loan mod programs have loosened their guidelines or gotten more efficient over time).

Apply through your lender to the federal HARP program, and also to the lender’s own loan mod program. Visit this federal site to determine whether there are additional state programs available to you under Treasury’s Hardest Hit Fund. Apply to the Home Save program run by NACA.

6. Short-sell it.

If after all this you still feel like you will face foreclosure, talk to someone about a short sale.  If you speak with someone experienced in negotiating short sales, you may be able to save your house from going to foreclosure.  Your credit will still take a hit, but much less of one that a foreclosure would bring.  In addition, you would avoid having to check “yes” to having a past foreclosure on any future loan application you make going forward.


If you feel like you won’t be able to catch up on your mortgage payments, want to avoid foreclosure, and need to sell fast, you can always talk to us at 205-390-1050.  We offer several solutions to avoid a foreclosure on your record.  Plus, we buy houses “AS-IS” so you don’t have to go through the headache and expense of fixing the house up for sale.  We are also experienced in negotiating short sales with banks.  Call us ASAP at 205-390-1050 so that we may offer you a free consultation on how we may be of service.  You may also log on to and tell us about your house using our simple form.


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