By: Williamsburg Military Insider
A new report recently released stated that One in four homes with a mortgage in Hampton Roads was “underwater” in the second quarter. This means 25 percent of owners owed more on their mortgages than what their homes were worth. It’s also called negative equity or being “upside down.”
According to CoreLogic, a California-based research company hat’s up slightly from the first quarter, when 24.1 percent of homeowners with a mortgage were underwater, and up from the second quarter of 2010, when 21.1 percent of homes with a mortgage were in negative equity.
Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of the two. Nearly three-fourths of homeowners in negative equity have higher, above-market interest on their mortgages, the report said. More than 40 percent of borrowers with 125 percent or higher loan-to-value ratios have mortgages with rates at 6 percent or above, compared to 17 percent for borrowers with positive equity, the report said. Nationally, 22.5 percent of all residential properties with a mortgage were underwater by the end of the second quarter, and another 5 percent had less than 5 percent equity.
“High negative equity is holding back refinancing and sales activity and is a major impediment to the housing market recovery,” Mark Fleming, chief economist with CoreLogic, said in a news release.
More homeowners are finding as property values continue to drop facing negative equity themselves. Nearly three-fourths of homeowners in negative equity have higher, above-market interest on their mortgages, the report said. More than 40 percent of borrowers with 125 percent or higher loan-to-value ratios have mortgages with rates at 6 percent or above, compared to 17 percent for borrowers with positive equity, the report said.
Some borrowers feel trapped; even though interest rates are low, lenders have tightened requirements, making it hard for the consumer in a negative equity situation to take advantage of low rates. Due to this it keeps borrowers in their adjustable-rate mortgages. Eventually, interest rates will rise, causing more defaults and foreclosures.
I am a REALTOR with Liz Moore & Associates Also; I am part of the Liz Moore & Associates’ Military Team which specializes in homes for sale in James City County, Newport News, Hampton, York County, Poquoson, and Williamsburg, VA as well as surrounding markets. I offer Active Duty friendly support to families relocating to Langley Air Force Base, Ft. Eustis, Yorktown Naval Weapons Station, and Cheatam Annex. When you PCS to Hampton Roads, VA you will find that I understand that when a family member joins the military, the entire family belongs…thank you for serving our Country, and I look forward to serving your real estate needs!
When you are transferring to Langley AFB, Ft. Eustis, Yorktown Naval Weapons Station or Cheatam Annex, if you’re interested in buying a home for sale call 757-651-3763 or e-mail me at email@example.com