eli5 What does it mean to be “upside down” on your home loan and how does it happen?
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True story:
I bought a cheap condo right at the height of the real estate bubble, I paid 110,000K for the condo. My down payment was 20K, mortage 90K.
The stock market crashed and my property value dropped to 30K, which left me with a loan to value ratio of 300%, meaning I owed 3X what the condo was worth. I was under water or upside down by 70,000
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