4 Things to do if You Are Upside-Down on Your Mortgage in Wisconsin

If circumstances force you to sell your house due to foreclosure instead of waiting out a market turnaround for values to rise, you may feel backed into a corner.

Being upside down on your mortgage—owing more than your home is worth—can feel like quicksand. With 3.4 % of Wisconsin mortgages now “seriously underwater” (one in every 29 loans) attomdata.com and Milwaukee prices swinging 11 % year-over-year redfin.com, knowing your exit routes is essential. Below are four practical moves that protect your credit, your sanity, and, when possible, your wallet.

Get a Reality Check on Your Equity Gap

Why it matters: Decisions without solid numbers lead to expensive detours.

  • Confirm today’s payoff. Call your servicer for a current payoff quote that includes interest to your target sale date.
  • Pin down market value. Pair a licensed appraisal with recent Milwaukee comparables: the median listing price is $230 K realtor.com, while the median sale price sits at $239 K redfin.com.
  • Calculate the gap. If you’re $20 K or more underwater, jump to strategies 3 or 4.

Restructure the Loan Instead of Leaving

If your income is steady and you want to keep the house, talk to the lender about:

  1. Rate-and-term refinance—hard with negative equity, but FHA Streamline or VA IRRRL programs waive appraisals for qualified loans.
  2. Loan modification—extends the term or drops the rate; the Q1 2025 national delinquency rate is 4.04 % nationalmortgageprofessional.com, so banks are listening.
  3. Principal forbearance—rare, but some servicers tuck part of the balance into a balloon due at sale.

Heads-up: Every reschedule pings your credit and may reset amortization. Run the math first.


Turn the Home Into a Cash-Flow Asset

Milwaukee’s average rent is $1,403 (May 2025) zillow.com. Compare that to your PITI payment:

  • Positive cash flow? Lease it out while you ride the market. Even modest equity growth (3–5 % annually) can erase today’s deficit within five years.
  • Negative cash flow? Consider renting rooms or using short-term platforms to bridge the gap.

Unique angle: “Rent-to-wait” coupled with a fixed buy-out—Kustom Property Solutions occasionally structures lease-option offers where we handle property management and maintenance, pay you a set monthly amount, then buy at an agreed price once values recover. Ask how it works.


Short Sale vs. Direct Cash Offer

FeatureShort Sale (MLS)Direct Cash Sale → Kustom Property Solutions
Timeline90–180 days7–21 days
Showings/repairsRequired to please buyersNone—sold as-is
Commissions5–6 % (usually paid from proceeds)$0
Bank approvalMandatory, often multiple roundsWe negotiate payoff for you
Deficiency judgment riskYes, unless lender waivesWe push for a written waiver
Stress level🔴🔴🔴🟢

Why the Waiver Matters in Wisconsin

Under Wis. Stat. § 846.10, lenders may waive the right to chase you for the shortfall, often in exchange for a shorter redemption period docs.legis.wisconsin.gov. Our legal team leans on this clause so you walk away debt-free—and faster.

Case Study: Example

Payoff: $278 K • As-is value: $255 K • Gap: $23 K
Closed in 12 days, secured a deficiency waiver, and even arranged $4,000 in relocation assistance for the seller. No listings, no strangers touring the home.


Key Takeaways

  1. Know your numbers before acting; Milwaukee values vary block by block.
  2. Restructure or rent if you can stomach a longer road to equity.
  3. Wisconsin law lets savvy sellers erase deficiencies—but only if you negotiate smartly.
  4. Kustom Property Solutions delivers a stress-free, cash exit that can close in three weeks or less, with zero fees or repairs.

Ready to Get Right-Side Up?

Call (262) 432-1760 or fill out our form. We’ll send a written cash offer within 24 hours, handle the bank, and close on your timeline—so you can move forward without the weight of an upside-down mortgage.

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