What do you do if you owe more than your house is worth?

Question

We bought our house 3 years ago for 849,000. Yes we did the zero down with two loans. Now with all the foreclosures and the market our house is worth about 620,000 and the house across the street just sold for 570,000. We are still paying the high property taxes even though our house isnt worth that now. I did put a call into the city to have our property reassesed. Just want to know what our options if any are out there.

Answer 1

Keep making the payments on your loans on-time.  You are not going to be able to refinance.

Whatever you do make sure not to get a divorce, lose your high-paying jobs, or get injured.

Answer 2

That your property is not worth what you paid for it now is irrelevant to whether or not you continue to make the payments as agreed.  The lender(s) gave you $849,000 and you are obliged to repay what you borrowed.

As far as a tax assessment goes, don't expect miracles there either.  If your assessment value is lowered to current market value, the same will happen to all the OTHER properties in your taxing district.  As soon as that occurs, your tax rate per thousand of assessed valuation will increase to make up for the expected revenue shortfalls.  You don't have a right to have your property assessed at market value without the same happening for everyone else.

Answer 3

Are you looking to get out of the house all together or just more concerned about the property taxes?

Answer 4

Your best option is to keep making your mortgage payments and wait for housing to turn around - probably several years away.

Answer 5

If you want out you might me able to do a short sale.

Answer 6

If you love the house (I'm hoping you did if you shelled out that much $$ for it) then stay in it and keep paying your mortgage.  Eventually the market will start to go up again, though it make take 5-10 years for your house to be worth what you owe.  If you sell you'll be in a huge hole.  

Your reassessment will help once they get around to it, but you signed papers buying the house for 849K so you should've expected taxes at that amount or for them to go up.

Not much more you can do than sit tight and keep paying.

Answer 7

you can fight your taxes, and get them lowered..its a paper chase.  you have to go to your county, submit the paperwork w comps, and cross your fingers

when it comes back, simply resubmit the forms...dont change anything, at least thats how it works in Cook County...everyone gets denied the 1st time, you have to fight

and, plan to ride out this crunch for 5 years while values straighten out.

Answer 8

The real estate market is cyclical, which means, there are ups and downs of course.  Conditions will improve, and your home may increase in value but over a long period of time.   If you like your home, can make the mortgage, property tax, and insurance payments then your best bet is to ride it out and wait a while.  If not, then you will be responsible for the difference between the sales price and your home's value (plus agents fees and any incentives you might offer a potential buyer).

Answer 9

Not many options.  Either continue to pay for it- or lose it thru foreclosure.  You can't refinance since you owe more than it's worth- same with selling.  Give it a couple of years & things will be back to normal.

Answer 10

your options are:

sell the house and pay the difference it sells for and what you owe.

wait it out.

Answer 11

if you are able to pay and like the house --keep paying the market will come back at some point