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> Other house prices presumably fell along with yours so you can still sell yours and buy a similar one. Not if the house lost more value than your down payme
by bronson 16y ago
> Other house prices presumably fell along with yours so you can still sell yours and buy a similar one.
Not if the house lost more value than your down payment. If you're underwater (and a lot of people are), you need to either arrange a short sale or bring money to the close. Either way it's nowhere near as easy as you imply.
- dreeves 16y agoIf you owe more than the house is worth then theoretically you should default and walk away. I know that question has been debated endlessly and I don't understand all the practical implications like what it means for your credit rating, or even whether it should be considered ethical. I concede that if defaulting is not an option then you may be stuck if you owe more than the value of the house and can't borrow more money. Good point.
- barrkel 16y agoDefaulting differs in different countries. You may be forced to liquidate other investments to make up the shortfall. Nonrecourse loans are not usual outside of California, AFAIK.
- martin 16y agoAlso, people don't usually sell their house and buy a similar one in the same place -- they either upgrade or downgrade, or move to a different neighborhood or city, and in either case, the prices are likely not to have moved in the same direction at the same pace. In my neighborhood, 1-BR coops have dropped in price more quickly than 2-BRs, for example.