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Person buys hypothetical $500k house around 2006-2008. Drops to $400's from 2009 to 2019. What if someone wanted to move between yet did not have any savings. What do people do when underwater for years at a time? What are the realistic options?
Person buys hypothetical $500k house around 2006-2008. Drops to $400's from 2009 to 2019. What if someone wanted to move between yet did not have any savings. What do people do when underwater for years at a time? What are the realistic options?
Realistically, you're up the proverbial creek without a paddle. Basically, your choices are to stay there and keep making payments, or try to work something out with the bank/lender. If you can't do either, then bankruptcy and ruined credit is the likely outcome. You'll be in a financial hole for years any way you go.
Oh, I forgot one other option. Find a rich woman and get her to marry you. Whether that's a feasible option is entirely up to you. If you've got what she wants, then you're good to go.
Person buys hypothetical $500k house around 2006-2008. Drops to $400's from 2009 to 2019. What if someone wanted to move between yet did not have any savings. What do people do when underwater for years at a time? What are the realistic options?
How much money did they put down? If they put 20% down on a 500k house that’s now worth $400k, they at least wouldn’t owe more than it’s worth (although if you’re referring to 2006-2008 many homes dropped more than 20%).
Other options of course would be rent it out, try to get a short sale approved (if it was worth less than they owed), or get foreclosed on. But even if the house was worth what they owed and they had to come up with the money for commissions, I’d have to think doing that would be better than getting a foreclosure on your credit.
Person buys hypothetical $500k house around 2006-2008. Drops to $400's from 2009 to 2019. What if someone wanted to move between yet did not have any savings. What do people do when underwater for years at a time? What are the realistic options?
Depending on whether you are in a recourse state or not , you can walk away .
If they are buying another home somewhere else than the drop in the other area may be better or worse than where they are selling
renters have good reasons to rent,they dont necessarily want to buy a house at that time,in that city.
There is a trend now,some younger foolks have no urgent need to buy a house,some dont even own a car.
Person buys hypothetical $500k house around 2006-2008. Drops to $400's from 2009 to 2019. What if someone wanted to move between yet did not have any savings. What do people do when underwater for years at a time? What are the realistic options?
There are parts of the country where homes are not appreciating and losing value. If someone bought in 2008, never refinanced, and had a 5% interest rate, they should be able to clear their mortgage on the sale of the home. They won't walk away with much of anything, but at least they can move to a different area.
I had some NY clients in that situation a couple of years ago. Their home was worth less than what they paid and put into remodeling it over time, but they were able to clear the mortgage and move out here.
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