Growing Number Of Homeowners Are Stuck Owning Two

(If you thought having one mortgage was tough, then welcome to the wonderful world of "tweeners." )

These are people who have gotten stuck owning two houses; which is a phenomenon that is becoming much more common as our housing market continues to slow.

This happens by homeowners falling in love with a bargain priced home and buying it before they sell their old one.

Now, since it is taking longer and longer to sell a home, these people find themselves in possession of two homes before they even realize what they have done.

A November 2, 2006 article by Stephen Gandel of Money Magazine, "Slow-market crisis: Stuck with two homes," looks at how a growing number of people are saddled with double mortgage payments while they wait for their old home to sell.

The article starts of by telling the story of the Peelers', a couple who moved to Philadelphia from Chicago before their home in Illinois was sold. They did not think it would be a problem to sell their home in the Windy City, but they now find themselves expecting a child, and paying two mortgages.

"The Peelers are among the increasing ranks of 'tweeners,' or people who've inadvertently ended up juggling the costs of two homes as a result of the slowing market. Many victims of this fearsome financial trap have been wooed by the upsides of the new buyer's market: increased choice and better prices."

"'But they forget the other side of the equation,' says Albert Hepp, owner of BuySelfRealty.com in Minneapolis. Only when they try to unload their old house do they realize just how hard it is to sell. Then, like the Peelers, they find themselves stuck with one more property and one more mortgage than they'd like or can afford."

Right now, the National Association of Realtors predicts that there are 4 million homes for sale right now, meaning it will most likely take longer than ever to sell a home.

So if a homeowner falls in love with a home, it is more than likely that they will not sell their old home before the close on the new one, and this is the situation that a growing number of homeowners are finding themselves in. But there are ways to avoid being a tweener.

"Sell First, Fall in Love Later. Indeed, it's hard to resist the bargains. All that inventory! Your dream home is finally on the market! But your best bet is to avoid shopping until you unload your current home. Better to get the harder part over with first. Buying will be comparatively easy; in this market, there will always be another house to fall in love with. Even if you have to live in a hotel while you look, you will likely come out ahead compared with carrying two homes."

Also, many homeowners are reluctant to lower the price of their home, but if a property is overpriced in this market, it just won't sell. Bottom line: price like a buyer.

If it is already too late, and you are already a tweener, or think you may be one in the very near future if your house doesn't sell, one of the best ways to eliminate this problem is to become a landlord and rent out your property to generate funds to pay the mortgage.

"Another way to use your vacant house to float you: rent it out. A combination of more renters and fewer units is expected to drive rents up 5% next year on average nationwide, according to the NAR, and that may be a boon to struggling sellers."

Carrying two mortgages can be a financial downfall for the majority of households, so it is best to avoid it all together, if you can.

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