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Zillow report: Many homeowners still dealing with mortgage issues
Despite recent improvements in the housing market, many current homeowners are still in financial trouble with their mortgages.
According to the first quarter Zillow Negative Equity Report, 31.4 percent of U.S. homeowners with mortgages are underwater, owing $1.2 trillion more than their homes are worth.
Of the 16 million homeowners underwater, 40 percent owe between 1 and 20 percent more than their homes are worth and 15 percent owe more than double the value of their home.
“While it was disappointing to see negative equity numbers remain so high, it is important to note that negative equity remains only a paper loss for the vast majority of underwater homeowners,” said Stan Humphries, chief economist at Zillow. “As home values slowly increase and these homeowners continue to pay down their principal, they will surface again.”
Recent legislation set forth in Congress could help underwater homeowners lower their rates. The Responsible Homeowners Refinancing Act could help as many as 3 million borrowers save up to $3,000 a year by refinancing at low rates.
Alternatively, if you don’t want to get yourself into a financial mess with an expensive mortgage, renting your house is a viable option. Rental demand remains high nationwide despite low home prices and mortgage rates.
Category: Rental Market News