Home Owners are Underwater!
According to some estimates as many as 12 million borrowers may have negative equity in their home, meaning that they owe more on their mortgage loans than their homes are currently worth. However, according to statistics gathered by C.A.R. over the last 40 years, homeowners who purchase a house and keep it for at least five years have an average annual rate of return of nearly 12 percent.
Although California’s inventory of homes with high negative equity is higher compared with other states, lower home prices have increased affordability, making it easier for first-time home buyers to enter the market and others buyers to move up to larger houses or more desirable neighborhoods.
Borrowers who are facing foreclosure should work with their lender and apply for a loan modification program. Many financial institutions are offering homeowners the opportunity to rewrite an adjustable-rate mortgage into one that is fixed for 30 years. Some banks also are offering existing customers zero interest for a short period of time and lowering the principle balance on the loan to make payments more affordable. Call you lender to see if they will work with you. If you can not afford your mortgage anymore, contact your local short sale specialist who may be able to help you avoid foreclosure.
Kathy Dyer Realtor CABRE #01723710
KW Coastal Estates
Carmel Ca. 93923