The envelope from your mortgage company sits unopened on your kitchen counter. You already know what’s inside – another statement showing you owe $425,000 on a house that’s worth maybe $380,000. Your neighbor’s identical house just sold for $375,000, and yours needs new carpet.
Welcome to the club nobody wants to join: homeowners who owe more than their house is worth.
If this describes your situation, take a deep breath. You’re not alone, you’re not stupid for buying when you did, and you have more options than the sleepless nights might suggest.
How Did This Happen?
Sarah and Mike Chen thought they were making a smart investment when they bought their Lakewood home in late 2021 for $475,000. They put down $50,000 – their entire savings – and felt proud to own a piece of the American dream.
Two years later, similar homes in their neighborhood are selling for $380,000. With their mortgage balance at $425,000, they’re $45,000 underwater. Add in selling costs, and they’d need to bring nearly $70,000 to closing.
“We keep asking ourselves, ‘How did we get here?'” Sarah explains. “We weren’t speculators or house flippers. We were just a family trying to buy a home.”
The Chen family’s story reflects thousands of Denver area homeowners. Market corrections happen. Interest rate changes affect home values. Economic shifts create situations that seemed impossible just two years ago.
You didn’t cause this. The market created it.
Your Real Options (Beyond Panic and Denial)
When you owe more than your house is worth, you have five realistic paths forward. Let’s examine each honestly:
Option 1: Stay and Wait It Out
The Strategy: Keep making payments and hope the market recovers.
Reality Check: This works if you can comfortably afford the payments and don’t need to move. Denver area home values typically recover over 5-10 year periods, but there’s no guarantee of timing.
Best For: Families with stable income who love their home and neighborhood.
Warning Signs: If you’re struggling with payments or need to relocate, waiting could make things worse.
Option 2: Traditional Sale (Bringing Money to Closing)
The Strategy: List with a realtor and bring cash to cover the shortfall.
Reality Check: You’ll need $40,000-70,000+ depending on your situation, plus 3-6 months for the sale process.
Best For: Homeowners with significant savings who need a clean exit.
The Problem: Most underwater homeowners don’t have tens of thousands sitting around.
Option 3: Short Sale
The Strategy: Ask your lender to accept less than you owe and forgive the difference.
Reality Check: Short sales in Colorado take 4-6 months on average, require proving financial hardship, and may still leave you owing money to the bank.
Best For: Homeowners facing genuine financial hardship who have time to wait.
Hidden Costs: You’ll continue making payments during the 4-6 month process, potentially spending $15,000+ while waiting for approval that might never come.
Option 4: Strategic Default/Foreclosure
The Strategy: Stop making payments and let the bank take the house.
Reality Check: Foreclosure destroys your credit for 3-7 years and may not eliminate all debt. Some lenders pursue deficiency judgments in Colorado.
Emotional Cost: Many families describe foreclosure as traumatic and shameful, even when it’s financially logical.
Best For: Homeowners with no other viable options who can handle the credit and emotional consequences.
Option 5: Creative Financing Solutions
The Strategy: Work with investors who use subject-to agreements, seller financing, or hybrid solutions.
Reality Check: These solutions can eliminate your monthly payment burden while protecting your credit, but they require working with ethical, experienced investors.
How It Works: An investor takes over your mortgage payments while you transfer the deed. You’re released from the monthly obligation without foreclosure damage to your credit.
Real Example: The Morrison Family Solution
Jim and Lisa Morrison faced exactly your situation six months ago. They owed $445,000 on their Thornton home worth $395,000. Jim’s construction job had steady income, but Lisa’s recent cancer diagnosis created overwhelming medical bills.
Traditional options failed them:
- They couldn’t afford to bring $50,000+ to closing
- Short sale approval would take months they didn’t have
- Foreclosure felt like giving up on everything they’d worked for
SellFastDenver proposed a subject-to solution. They took over the Morrison’s mortgage payments immediately, eliminating the $2,650 monthly burden. The Morrisons moved to a smaller rental home they could afford, and their credit remained intact.
“We thought we’d lost everything,” Lisa explains. “Instead, we got our lives back. No more sleepless nights about mortgage payments. No more using credit cards to cover the gap.”
Six months later, Jim’s construction business is thriving, Lisa’s health is improving, and they’re considering buying again – something impossible if they’d gone through foreclosure.
Red Flags: Protect Yourself
Not every investor operates ethically. Avoid anyone who:
- Demands upfront fees before providing any service
- Pressures you to sign immediately without review time
- Won’t provide local references from past clients
- Refuses to work with your attorney or title company
- Makes promises that sound too good to be true
Legal Protections in Colorado
Colorado law provides some protection for homeowners facing foreclosure:
- You have 110-125 days after default notice before auction
- Right to cure (catch up payments) until 12:00 PM the day before auction
- 10-day redemption period after foreclosure sale
But don’t count on last-minute salvation. Early action provides more options and better outcomes.
Your Next Steps
This week:
- Calculate your exact shortfall (mortgage balance minus realistic home value)
- Assess your financial ability to wait for market recovery
- Research legitimate investors who specialize in underwater properties
Next week: 4. Get consultations from at least two different solution providers 5. Speak with a real estate attorney about your specific situation 6. Make a decision based on your family’s needs, not market predictions
The Bottom Line
Owing more than your house is worth feels overwhelming, but you have legitimate options. The key is acting while you still have choices rather than waiting until crisis forces your hand.
Whether you choose to wait it out, pursue a short sale, or explore creative financing, make sure your decision fits your family’s actual situation, not your emotions about the house.
Your Solution Awaits
If you’re ready to explore creative financing options for your underwater Denver area home, don’t let another month of stress and payments drain your resources.
At SellFastDenver, we’ve helped hundreds of Colorado families escape underwater mortgages without destroying their credit or forcing them to bring cash to closing. We understand that your house payment shouldn’t control your family’s future.
Ready to understand your real options? Contact SellFastDenver today:
- Call: (720) 458-4722
- Text: (720) 458-4722
- Email: info@sellfastdenver.com
- Website: www.sellfastdenver.com
Get your free, no-obligation consultation. We’ll review your specific underwater situation and explain all available solutions – including creative financing options that can eliminate your monthly payment burden while protecting your credit.
Remember: Every underwater mortgage situation is unique. We’ll connect you with qualified real estate attorneys and title companies to ensure any solution we develop protects your interests and meets all Colorado legal requirements.
Don’t let an underwater mortgage sink your family’s financial future. Call SellFastDenver today and discover how families just like yours have turned their biggest burden into their greatest relief.
Real estate transactions involving underwater properties and creative financing should always be reviewed by qualified legal and financial professionals.
