What Happens If You Owe More Than the House Is Worth?
Last updated: February 2026
Quick Answer
Being "underwater" doesn't mean you can't sell. Options include a short sale (lender accepts less), bringing cash to cover the gap, or loan modification. We can help negotiate with lenders to find a solution.
Your Options When Underwater
Option 1: Short Sale
Your lender agrees to accept less than what's owed. The difference is forgiven (though there may be tax implications).
- Requires lender approval
- Takes 60-120 days
- Less credit damage than foreclosure
Option 2: Bring Cash to Closing
Pay the difference out of pocket at closing.
- Only works if the gap is small
- Fastest option
- No credit impact
Option 3: Loan Modification
Work with your lender to reduce your balance or interest rate, then sell when you have equity.
- Requires lender approval
- Best if you have time to wait
- Not all lenders offer this
Option 4: Wait for Values to Rise
If you can afford to keep the house, wait for the market to recover.
- Only works if you can make payments
- Market timing is unpredictable
- May take years
How We Can Help
We have experience negotiating short sales with lenders. We can:
- Provide a written offer for your lender to review
- Help navigate the short sale process
- Close quickly once approved
Not sure what your house is worth? Call (561) 258-9405 for a free consultation.