eli5 What does it mean to be “upside down” on your home loan and how does it happen?

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eli5 What does it mean to be “upside down” on your home loan and how does it happen?

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Anonymous 0 Comments

You owe more than it’s worth. Imagine you borrow $1000 to buy a dinosaur. You make payments for 10 years of a 20 year loan, you still owe $500. However now they sell even cooler dinosaurs for $100. Its senseless to pay your debt and keep Billy (your dinosaur) even though you have grown to love his icy cold reptilian heart.

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