House Underwater!

According to a recent report 30% of homeowners are underwater on their home. Essentially an underwater home is worth less than what is owing to a the bank. If you are one of these homeowners, a number of considerations should be taken on how to proceed. First, are you current on your mortgage? If current, you should be thinking that you need a place to live and in a lot of cases a mortgage payment including the principal, interest, taxes and insurance is less than comparable rent. Second, how far underwater is your house? If you home is $40,000 or more underwater you should run a calculator to see how many years it will take to bring your house above water considering payments and inflation of home prices. Third, can you afford the home even if a disaster strikes? If a family member suffers a job loss or health problem can you remain current on the home? If the answer is yes, stay in the house. If the answer is no, either you need greater savings or consider if the house if affordable considering the above factors.
If ultimately you decide you cannot afford the house, generally in Minnesota only a 2nd mortgage can pursue you and seek judgment. A bankruptcy can discharge any 2nd mortgage judgment.