The housing crash of 2008 combined with high unemployment rates and the transient military lifestyle has left far too many service members facing upside-down mortgages, where homeowners owe more than the home is worth.
Military homeowners, like all others, should start with their lender or servicer to see what help might be available. They can also explore their eligibility for the government's Making Home Affordable program, which enables some underwater homeowners to refinance.
But when a PCS, a deployment or another military move is on the horizon, these homeowners often find themselves in a tough spot. Here's a look at three ways some are dealing with the epidemic:
Probably one of the least appealing options for a military member is waiting until the market improves. Postponing PCS or deployment orders in order to sell your home just isn’t possible. If a service member is able, he or she can have a spouse or family member stay and maintain the home until it sells.
Tony and Jennifer Hernandez have experienced 16 moves in 20 years as a married couple. For their latest transfer, Jennifer will stay behind while Tony rents an apartment in his new location. In addition to keeping the kids in the same school, they are hoping to see the market improve for their upside-down mortgage.
The 2012 housing market outlook does show signs of slight improvement in sales with hope in a rising trend.
Military members know moving is part of the job, but the desire to own a home is still strong for many. Homeowners may be able to boost their chances of selling in a crunch by working on the home's appeal. Here are some ways:
Simply selling your house or letting it foreclose can lead to a loss in security clearance. As long as you follow the two out of five years rule for capital gain, which entails owning and living in a house for two years, you can try to weather the market for three years by renting your home. Landlord regulations vary by state so before renting your home out, be sure to learn the different ways of rent calculation, application screenings and your responsibilities as a landlord.