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Home Owners Struggling to Stay Afloat With Underwater Mortgages

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By : Gary Ashton    99 or more times read
Home owners who bought their homes near the peak of the real estate bubble are eagerly awaiting the news that the market has hit bottom and values are beginning to increase again. Some recent reports suggest that this wildly anticipated bottom has been hit, but have home values actually hit bottom?

Some experts think that home prices have hit bottom now while others are forecasting that the bottom wonít truly been seen until at least the second quarter of 2010. While so many home owners are struggling to decide what the best way to deal with their underwater mortgages, many people are watching the trends very closely right now.

21.4% of mortgages are underwater as of the end of the fourth quarter of 2009 and it will be some time yet before we see exactly where things stand for the first few months of this year. While many people have been forced out of their homes by foreclosure proceedings, there are many who are desperately trying to hold on to their homes until the market recovers enough for them to get at least what they paid for their homes out in a sale.

However, is it reasonable for people to hold out for a market recovery that is substantial enough to sell their home for a high enough price so that they break even? In some markets it might be feasible, some areas of the country have had relatively moderate downturns and are making a recovery even now; other areas of the country are continuing to experience failing home values and a building up of vacant properties in their local market which further suppress home prices.

The key to whether or not you should hold onto a home with an underwater mortgage is likely going to depend a lot on a few things: how far underwater your mortgage is, how long you can wait, and where in the country you live. If you are hoping to recover hundreds of thousands of dollars worth of value drop, you might want to rethink your strategy unless you have a lot of patience.

Make sure that your only strategy to the value problem isnít just waiting for your home to become worth what you paid for it; there are plans in place to help you modify your mortgage if you qualify for them and there is talk of new programs becoming available to reduce the amount of principle that owners owe on their homes to help cut down the amount owed as well. The best bet for many home owners is to talk to their lenders to make sure that all available avenues are being pursued to help owners stay in their homes. Hopefully the end of this current economic storm is in sight now.
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