There is no reason to give up hope if your home is underwater.  Make the right decisions from here on out and you just might be able to save your home.  Let’s take a quick look at how you can maximize the value of your underwater home.



Refinance the Mortgage

Those who are underwater on their home might qualify for HARP.  This program was launched after the housing meltdown of 2008.  HARP provides a way to refinance a home when the owner is underwater.  However, in order to qualify for HARP, you must make on-time mortgage payments across six months.  Furthermore, you will be ineligible if you have been late on a single payment in the prior year.  The other caveat to the HARP program is that it is strictly applicable to those with home loans taken out prior to May 31, 2009 in which there is equity below the 20% mark.  If refinancing the mortgage sounds like something you are interested in, be sure to consult with a respected lender for guidance prior to making a decision.



Rent out the Home

You might be able to pay the monthly mortgage and then some if you are willing to rent out part of the home.  In fact, it might even make sense to rent out the entirety of the home for a year or two while living with a family member, friend or in a more affordable apartment.  You can use the money you receive in rent to pay down the money owned on the home and eventually return.



Improve Your Home Prior to Selling to Maximize Its Value

Make strategic improvements to your home and you just might be able to sell it for more than you originally anticipated.  Even seemingly minor home improvement projects have the potential to increase the property’s value by a considerable margin.  Be sure to do your research prior to spending for home improvements so you know which renovations/additions are most likely to ramp up your home’s value and subsequent selling price.



Remain in the Home to Build Equity

Though staying in a home that is currently underwater will require patience, it might be your best option.  If necessary, take on a second job, start a side hustle or request more hours at your primary job.  Reduce your budget.  Put every last penny of your income toward your home debt.  Once you pay down the principal, you will be able to look forward to eventually own the home outright.



Modify the Loan While Improving the Home

Loan modification is the temporary or permanent reduction in the mortgage loan interest rate.  Ideally, the mortgage loan interest rate will be reduced to the level necessary for you to make the monthly payment.  However, there is no guarantee you will be approved for a loan modification.  The lender will likely request you make trial payments that are typically less than the payments specified in the original mortgage contract.  The downside to a loan modification is it is likely to reduce your credit in the event the lender reports you as delinquent.  However, altering the loan will free up more of your discretionary income and give you time to slowly but surely improve the home to hike its value and possibly sell it at some point down the line.