Unfortunately, hundreds of thousands if not millions of homeowners are realizing this fact in today's depressed housing market. It is mostly a result of either a "no money down" home purchase or tapping that 'ever-growing' equity with some form of 100% home financing. The worst scenarios for home owners are those situations where there is a looming ARM adjustment in a year to three years where the homeowner had planned to refi or sell before mortgage interest rates adjust higher. Have you ever noticed Adjustable Rate Mortgages NEVER go down? It's SO painful!

For some that have a fixed rate, it's just a matter of waiting until home values go up. In many, if not most homes this has historically been the case. If you stay in one house long enough the value will eventually go back up. The exceptions to this waiting strategy occur in very localized areas where the economy has gone down the toilet giving homeowners a double whammy.

So what's a homeowner to do? Actually there are a number of things that can be done. We will cover them in two parts. Part 1 is related to financing and Part 2 is related to the home itself.

1. Financing related actions:

a. If you acquired a sub-prime mortgage due to credit issues, begin a full court press on raising your credit scores. This is too broad a subject to cover here but you must start TODAY! Go to our website in the upper part of the page above my toll free number and click on the link for guaranteed help.

b. If you had to get a stated income sub-prime or "Alt A" mortgage due to income that is difficult to document, you need to talk with your CPA or accountant. If you are using aggressive tax tactics to shelter some earned income you may need to need reconsider, especially if the benefit was a one-time tax reduction. Remember, you are paying a higher interest rate for as much as 40 years. You could even file an amended return for the prior year or two. Work with both your accountant and mortgage professional to analyze the situation. Your goal is to have enough documentable income to qualify for a conforming mortgage, which will have a lower interest rate throughout the life of the loan.

c. Another thing you could do is to sell a car to get rid of a car payment. If you have to replace it, buy a much cheaper car or let a non-borrowing spouse finance it so it doesn't hit your DTI.

2. Home related actions:

a. Get an accurate appraisal even if you must have a new one done. Pay close attention to negative adjustments between your home and the comparables. It should give you a starting point on what modifications you can make. Yes you may have to put more money in your home to significantly increase the value but you will do it on the absolute cheap (cheap price not cheap quality). Don't hesitate to pick up the phone and ask your appraiser what should be done. A good example would be to finish a basement or eliminate some condition items noted by the appraiser.

b. The most important single item most homeowners overlook is STREET APPEAL! At resale, it's everything. Cute houses resell better and faster in ALL markets.

c. Much of the work must and should be done by the homeowner. If you use contractors, only use them for critical building code items like electrical, structural and some plumbing, otherwise you could make your situation worse.

d. Consult a realtor about what buyers want and don't over improve for your neighborhood. It's hard to get your money from $10,000 dollars worth of granite countertops in many locations much less make money.

e. If you must sell or want to sell, clean and depersonalize your structure. Nothing on the floor and empty looking closets, personal photos gone to storage, no wild colored paint or special paint treatment (There IS a reason relocation companies favor ivory.), and no broken ANYTHING!

There you have it. So stop being depressed and start taking action. A planned set of actions is the best cure for many anxieties. Good Luck!

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