A lot of homeowners here in Dr. Phillips and Windermere as well as the rest of the nation who bought their home during the boom years have quite a bit of negative equity in their home. The options are to ride it out until we see 2007 prices, or just walk away from the house.
I am by no means suggesting not paying your mortgage. Florida is a deficiency state meaning a foreclosure could mean that the bank can sell the deficiency judgment that is valid up to 20 years to a collection agency to pursue your future wages.
You will also not be able to qualify for a Fannie Mae loan for 5-7 years.
If you complete a successful short sale, you’ll be eligible within 2 years and you clear yourself of the deficiency judgment.
Historical appreciation for real estate is between 3% to 4%, so you have to ask yourself… does it make sense to keep paying on a home that is under water?
You could walk away, attempt a short sale, or wait for home values to come back up.
A knowledgeable real estate pro can be a lot of help in deciding which course of action is the best for your particular situation.