i am ready to die i owe my on my home than my home is worth

Please hang on, things have to get better!!You are stronger than you think..Going through hard times make us stronger..I've been there and it's true.....

So what?  Being upside down does not mean the bank is going to foreclose on you. 

i don't understand all the gloom on this forum. my car is worth less than i paid for it. my home is worth a little less than six months ago. my stocks are worth a lot less than they were worth last year. but i have a house to live in, a car to drive, and a i'm not retiring yet so the stocks stay where they are. i don't have to sell my house and my car will run fine for many more years. my net worth may look different than it did a while back but so what? i'm meeting all of my bills and life is pretty comfortable. the end of the world, contrary to the opinion of some, is not around the corner. lighten up, people.

The only problem come if you HAVE to sell.  If you were renting you would never own what you are renting.  If you take out a 15 year loan in 15 years you have paid it off and you own it.  That is what I did and I paid it off 3 years ago.  Now if I want I can sell the home I am living in and buy something else and if the price I paid for it is more than I get, so what - the next home I buy will be less also... 

With the way many of you are thinking of it then just as soon as I drove off a new car I would need to sell it because I am upside down at that point. 

It's a the biggest financial purchase a huma  being can make.

[content removed by moderator for being a personal insult]

...but people have to get used to the idea that just because it is a big financial purchase does not guarantee that it will go up in price immediately and consistantly. no investment is guaranteed in the short run but most smart ones will pay off in the long run. the days of doubling your money in 2-3 years are gone (at least for now). the housing market, like any other investment market, is always changing and goes through continuous up and down cycles.

if you buy a house that you can afford to pay for, and you live in that house, you have a place to live, a nice tax deduction, and (most of the time) a good investment in the long term. the problem we are now facing is that many people bought houses they could not afford, hoping that they could hang on for a year or two and sell it at a huge profit. like most get rich quick schemes, that formula didn't last very long. and also like most get rich quick schemes, there are a few big winners and a lot of losers.

No socal bubblehead it is you that does not understand.  If you buy a house and the value goes down it does not matter until you have to sell it and if you keep the house and pay it off you have value you did not have before.  The thing you want is a huge profit quickly.  Even if it takes 15 years to get back to the price you paid, if you have it payed for then you have much more value than if you rent.

You pay 250,000 for the home in 2006

You have a 15 year loan and the home just gets back to what you paid

In 15 years you have 250,000 in value and if you rented you have nothing.  Again, what you want is to sell your home in a couple of years and clear 50 to 100 thousand on the deal.  Not going to happen but owning a home is still a good investment.

sburke, the agony is that if you have a loan of $250k, but the house is valued at $150k.  Which mortgage would you pick?  I don't know about you, the loss is quite devastating and real.

Wait out the storm...no need to rush out to buy...    

No, the loss is not real until you sell!!!  Just like the 401K I own it has lost a huge amount of value but if I don't sell at these low prices I have not lost ANYTHING.  OF COURSE there are people out there who have to sell now and for them it is devastating and I am sorry for them BUT if you don't need to sell there is no loss.

In the last month my home has lost in value (according to Zillow) $39,000, but what effect is there - I am still married to the same person, I still have the same amount of kids, I drive the same car in fact NOTHING has changed in my life at all.  The house is worth less money but it has no point until I sell.  So big deal - it just does not matter.  Again, if I had to sell it and it were not paid off it would make a huge difference.  BUT, even if I had to sell it (if we had moved out of state for instance) it would not make any difference if the area I was moving to had a similar decrease in the value of the home I would plan to buy.

I sell my house that I bought for 250,000 for 150,000 and I move to another state and buy a home that used to be worth 250,000 and I pay 150,000 then really nothing has changed.

Again, all of that is true if I own the home.  If I owe on the home it is a different story.  I bout for 250,000 last year and borrowed 250,000 and have to sell 150,000 I HAVE LOST 100,000...  Now I do have problems.  So keep the home pay it off in the 15 years and then you still have a profit.  The only problem comes when you HAVE to sell....

So keep the home pay it off in the 15 years and then you still have a profit

Except what happends in 15 years when the house is still only on the market for $150,000?  This can and might happen, I hope you do realize this.  So not only did you lose a nominal amount of $100,000, in real terms you lost closer to $200,000.  Go back and look at the time frame losses on past RE boom/bust cycles and you will see exactly this scenario.

Kind Regards

BUT you are not counting the money you are out with the rent. That would be 225,000 in rent a total loss.  At the end you have something worth 150,000 and if you rent you have nothing.  I don't see that as as a loss.

sburke, have you loooked at a rent vs. buy calculator? i would like to buy but i can wait, and its actually a cost saving to rent in my situation. $825 rent vs. payment, interest taxes and homeowners insurance.

Use this calc... http://www.vlender.com/cgi-bin/calc/rent_vs_buy.cgi

BUT in you calculations put 15 years of the term and 15 years for the time to sell and you can see it is a good deal.  What you are looking at is selling before it is paid and I have consistantly said that if you flip in this market you will not come out ahead....

sburke, while I see your point that there is a lot of angst about the perceived value of real estate and that a long term investment stands a better chance of appreciating than a short term investment your statement about not losing is not quite correct.  If you were to put your assets and liabilities in balance sheet you might see a loss.  If your restricted cash in the form of the 401(k) has lost all of the growth and some of the invested principal then you've lost money.  If the real property asset has lost $100k (which is the example above) then your asset is reduced $100k but your liability is still 250k (less any principal reduction, of course).  Therefore you have lost money and you've also lost value which could be translated into money if you need to secure a loan in the future.

All true if you sell instead of keeping the property until it is paid.  Is it a great "investment" NO WAY it iis a place to live.  AND I have to live somewhere so if I do not own I rent.  I took out a 15 year loan 20 years ago had it paid off in the 15 years now I have no rent or payments going out.  I own a home (worth less than it was a few years ago).

Once it is paid off it become realitve to the market what I mean by that is if I own my home and prices go up from 100,000 to 500,000 I can sell my home but I have to pay the same amount for another home of like value.  If my home was purchased for 100,000 and goes down to 75,000 and I sell my home I can buy a like home for 75,000.  There is no real difference.

Now if I buy my home for 500,000 and try to sell it 5 years from now and get 200,000 I am in real trouble.  I owe 300,000 more that I can get for the home and have nothing for a down payment.

Everything I said is based on paying the home off and living in it.  once it is paid off I pay no more rent and I can buy and sell the same value home.

sburke, i tried that calculator but i don't think it adds in local tax.basically i'm looking at $825 rent vs. about $1200 a month piti.  thats on 30 years no prepay and does not include  maintenance.thats with 10 to 15% down. i understand your point, not to panic if you own. i sure would like to buy one of these days.

I think some of this is a viewpoint.  I too have lived in my home long enough to have paid it off.  I've also been fortunate to have been able to use equity to make improvements and pay that off as well. I mention this to establish some bona fides here.  While it would be very difficult to lose the dollar investment I have in my home even at today's market I will not realize the same selling price when my home sells that I could have in 2006 therefore my viewpoint is that I have "lost money and will continue to see erosion" until my home does sell. 

Also, my 401(k) has seen a loss of both growth and contribution this year so my 401(k) this year is only worth $14000.00 not the $15000.00 I contributed.

Much of this is truly our perceived value which leads to disparate listing prices when we sellers put our houses on the market.  Again, with the loss of appraised value my net worth has taken a hit and can therefore be seen as a reduction of value or a loss.

I agree with you it does mean on paper my net worth has gone down.  My children will not get as much money on my death (not for a while yet) BUT (and again I say) my home has gone down 36,000 this past month but it does not make a difference if I own and stay in my home.  I still drive the same car, married to the same person, have the same kids, kick the same dog.... And if I do sell I can buy the same value house.  So for me nothing has changed EXCEPT on paper...

"No, the loss is not real until you sell!!!"

Sure. Also:

- Lack of insurance is only a problem if your house burns down/floods/gets burglarized!

- If you do not crash your car, do not worry about wearing seatbelts!

- Skydiving without a reserve chute? No problem... if your primary works!

Got it now? It's all about risk.

I agree with doobie57z, the calculator lists a tax advantage without factoring in the interest cost. Not very accurate and borders on misleading.

I will pray for you that your headline includes lots of hyperbole.  If your state is that bad because you are under water on your home, the loss of value is a lesser worry than your mental state.  Dude, it's only a stupid house.  I don't mean that to sound flippant; but to point out that even financial catastrophe is a temporary event.  Don't make your personal value dependant on your balance sheet.

(Steps off soap box)

Can you afford the payments?  Do you enjoy living there? Do you need to sell? Would the spread between your current carrying costs on the house and what you would pay in rent for a replacement cover a low interest note for the difference between what you owe and for what you could sell? (I just had a lender offer a seller a 0% interest note as part of a sale settlement)  If you need to sell would you qualify for a short sale?

I'll agree it sucks to be underwater.  It isn't however the end of the world or the end of the story.  No matter what your situation is, there is a resolution.  If you don't know anyone who can help you ask the right questions to help you toward a solution, shoot me an e-mail.  I won't know your market, so I won't be able to discuss specifics - you'll want someone who does know your area for that - but I'll be glad to play with a few ideas with you.

Chin up, friend; I'm praying for you.

Mr G -- Hang in there!  Do you have to sell your home right now?  If not, hold onto it and  hopefully in a few years you will be back in the black.  If you do need to sell, call 2 or 3 local real estate agents and ask them what they think your home is worth in today's market.

Best of luck to you!

You and everyone else, don't think you are alone.

Amen! Almost everyone I know is in the same sitution.

Well the first thing I would work on is trying to see things with the glass half full vs half empty.  Life is good - there are always many things to be grateful for.

If you have to sell the property and can prove hardship, get an expert realtor in your area to begin marketing the property as a short sale.

Don't feel bad you are in the same boat as others.. I built my own personal home with alot of my own labor or sweat equity. It sucks knowing that once I had $100,000 in equity and if I sell today I probably wouldn't make a penny. I guess just stay in your home until the market turns around.

If someone is deeply underwater on a place, I'm going to go out on a limb and assume that they don't have a 15 year fixed with 20% down. They are probably paying well above rent on a comparable house to "own" theirs. Yes, if they stick it out, it will be OK in the long term, but They will more than likely never break even financially with where they would be had they rented for 5 years, then bought after the correction has worked through the market and they've built a nice down payment with the money saved.

If your interest/taxes/insurance are > rent/insurance in this environment, you are throwing money away. Anyone who is planning to buy should be putting away the difference between their rent and their expected total cost of owning into an account that they don't touch.