Negative equity occurs when the value of an asset falls below the outstanding balance borrowed against it, often seen in property valuations affected by economic downturns.
An upside-down mortgage, also known as an underwater mortgage, is a situation where a homeowner owes more on their mortgage loan than the current market value of the property. This results in negative equity, making it challenging for the homeowner to sell or refinance the property without incurring a financial loss.
