Recent statistics show that 1/4 of all mortgage holder in the US have negative equity or "upside down" mortgages. What exactly does that mean? Negative equity is when the collateral that secures the loan (the property value) is less than the loan balance.  In it's simplest terms the house is worth less than the mortgage. A study down by First American CoreLogic shows the number of homeowners in this situation has increase over the past few years and will likely continue until home values stabilize.

What does that mean to the average homeowner?  Well, obviously no one wants to hear their home value has gone down, but unless you are looking to sell, refinance, or borrow against your home it doesn't mean very much.  Real estate appreciation is a long term proposition and as long as you continue to pay your mortgage and stay in your home, historically, you should see your value increase over time.

What if I need to sell my home now?  When a home is sold with negative equity the term used is a "short sale".  Most of the time in this circumstance the homeowner negotiates with the lender to accept a lower amount than the current loan balance.  This can be a difficult, timely, and stressful thing to do.  That is where a professional, experienced, agent can help. Our agents work with the owner to market the home, find a buyer willing to pay fair market value, and work with you and the lender to resolve the sale.  If you think you are in this situation and need to sell your home DO NOT wait for foreclosure from the lender. The lenders would prefer that you come to them with a reasonable offer rather than go through the expensive process of taking back your home - which they will just have to sell anyway. If you would like more information on how to handle a short sale please call one of our agents for a free, confidential consultation to determine your properties current value and discuss your options.

Boyertown Office: 610-367-2058               Pottstown Office: 610-326-0181