Do you owe more than your house is worth?

Do you owe more than your house is worth?

If so, that means your mortgage balance is higher than the value of your house, this is known as an “upside down mortgage” or “underwater mortgage”. Many homeowners find themselves lost in a situation like this. It may seem like a hopeless situation

How do you sell a house worth less than the mortgage?

When you owe more than the house is worth, it can become difficult to justify paying for the house. However, there is a way out, and that is through a process called a short sale.

A short sale is where you negotiate with the bank to sell your house for less than mortgage balance!

How does a short sale work?

A short sale works by starting a conversation with your lender that you would like to start a short sale process. If the mortgage company agrees to a short sale, you can sell your home and pay off all (or some of) your mortgage balance. Depending on your situation, the lender may require a small payment in order to receive a short sale.

What are the benefits of a short sale?

  • Eliminate or lower your mortgage debt
  • Avoid negative impact of foreclosure
  • May be eligible up to $3,000 relocation assistance
  • Start repairing your credit sooner than if you went through a foreclosure
  • You may be able to purchase a home with a Fannie Mae mortgage sooner (in as little as 2 years) than if you went through foreclosure (up to 7 years)

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

If you find yourself in a situation where you owe more than your house is worth, and you need to sell your home, then you should seriously consider a short sale. You should continue making your payments if you can. Do not walk walk away from your house. It may seem like a good idea, but you can make things worse for yourself if you walk.

If your house is in foreclosure or you’re behind on payments, then you can still complete a short sale. The key is to make quick decisions. If you are in foreclosure and you’d like to do a short sale, then CALL 713-322-6645 NOW or fill out the form below!

Fink Buys Houses will not charge you a fee for performing a short sale. If anyone besides the lender is requiring a fee, be wary, you may be dealing with a scam.

More information about short sales can be found at the Fannie Mae website.

Why is my home worth less than my mortgage?

There are many factors that cause a home to drop in value. If the home drops far enough in value, then you may find that you owe more than the home is worth.

Real estate follows a cycle of activity where home prices tend to rise for several years and then activity cools off.  At this point home values may remain flat and sometimes start dropping. Usually the factors that cause home prices to drop are:

  • Recessions
  • People moving out of a city/town
  • Natural disasters
  • Crime
  • Business relocation
  • Poor condition of the home

Recent Examples of Homeowners Owing More Than Their House is Worth

In 2008/2009 many homeowners saw the value of their homes drop due to a nationwide economic recession. Foreclosures and short sales spiked in activity. Many people could not afford their homes and had to relocate. In this scenario, a short sale helped them get out of a bad situation, and allowed them to recover quicker.

In 2017, Houston experienced catastrophic flooding from Hurricane Harvey. Hurricane Harvey flooded around 150,000 homes in the area, causing significant damage to homes. The damage was so severe that many homes dropped in value overnight. Unfortunately, many homeowners in Houston found themselves with a house worth less than their mortgage.

Most of the homeowners in Houston still have their jobs and the ability to continue making payments. This puts them in a unique situation because they do not have the risk of foreclosure looming over their heads. However, many people do not want to deal with fixing up their homes, and they would rather just sell their house.


If for whatever reason you owe more than your home is worth, and you want to sell, then consider the short sale option. CALL 713-322-6645 NOW or fill out the form below! There is no obligation,  we will determine if you are likely to qualify and can walk you through the entire process in more detail.


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