If you’re underwater on your mortgage — i.e., you owe more than your home is worth — you may be wondering how long it will be before you’ll resurface. While most experts agree we’ve reached (or are at least near) the bottom in terms of home prices, nobody is predicting a broad-based price recovery anytime soon.
Given this, HSH.com put together a couple of calculators for predicting when and how you can get back to even given your current circumstances.
Using their KnowEquity When calculator, you can plug in your initial loan amount, the term and interest rate, first payment date, home value, and expected rate of price appreciation, and extra monthly payments to predict when your equity will finally equal your loan balance.
If you’d rather pick a target date and figure out what you need to break even by then, you can use their KnowEquity How calculator. You’ll need the same information as above, along with a target date. The calculator will then tell you what sort of prepayments you’ll need to make your goal date.
Now that the feds have re-worked the HARP program to allow borrowers to refinance their mortgages no matter how underwater they might be, you should also consider refinancing your mortgage to make it easier to get back on track.
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While it is true that changes to Harp and the new settlement for those who don’t have Fannie or Freddie loans have made it possible to refi no matter how underwater you are, it is not true that the best rates are available. This is a wrinkle I really haven’t seen reported.
I will not be doing a refi under Harp 2, even though I qualify, because the terms I was offered were very unattractive. I hope people do the math before jumping at the chance to refi.
I was shocked to see that my state, Maryland, made the top 10 list of “underwater” homes.
I know that the home prices shot through the roof during the 2000s … we thankfully!!! bought in 1998 before all of the craziness.
I guess alot of people just keep paying on their underwater homes…because we haven’t seen alot of foreclosures around here and we’re in one of the highest priced counties in Maryland.
Hmmm… maybe alot of this is hidden.
Wish we had more “good government” people to elect to public offices … I think that would really help alot.