When you owe more on an asset than it is worth it means you have negative equity or are upside down on a loan. You can fix negative equity and there are numerous ways to do so. The method you choose will depend upon the type of asset and loan. Cars, houses, recreational vehicles, and business equipment are types of assets that are commonly financed. 

To fix negative equity on a car loan you can-

1.   Sell your car privately.

2.   Trade in the vehicle for something more affordable.

3.   Make additional monthly principal payments. 

4.   Refinance to a shorter-term loan. 

The same would be the case for a boat, motorcycle, or RV. If you choose to refinance the terms will be impacted by the balance owed on the existing loan and your credit score. 

To turn negative equity into positive equity on a home mortgage you can-

1.   Stay, pay, and build equity.

2.   Rent a portion of your home.

3.   Look into refinancing.

4.   Consider a short sale.

5.   Sell your home.

Home mortgages are a bit trickier to fix than car loans when they’re upside down, but not impossible. If you are struggling to pay your monthly mortgage on time, selling your home would be your best bet. The last thing you want to do is go into foreclosure. 

To avoid negative equity consider purchasing gap insurance for your next car and made additional principal payments on your mortgage. If you need help getting your financial ducks in a row, contact Alloy Wealth. 800-689-3935