If you're underwater on your mortgage, you're in good company. According to a report by Black Knight Financial Services, as of the end of 2015, an estimated 3.2 million homeowners across the country owed more on their mortgages than what their homes would actually sell for. And while the numbers have improved since the housing crisis, they're still well above historical averages.

Underwater mortgages make it difficult for property owners to sell their homes. Now if you're underwater on your mortgage but are managing to keep up with your payments and don't have any immediate plans to move, it's an aggravating but manageable situation. But if you're struggling to make your mortgage payments and need to sell, that's where the problem lies. Since you're not likely to find a buyer who's willing to pay more than the present market value of your home, its sale price probably won't suffice in covering your outstanding mortgage balance. If the latter situation applies to you, here are some options to explore.

Modest house

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Look into refinancing

Refinancing your home won't magically raise its value or lower your remaining mortgage balance, but what it can do is make your monthly payments more manageable while you bide your time. Of course, the tricky thing is that most lenders won't let you refinance unless you have at least 20% equity in your home, which won't be the case if you're underwater. But thanks to the Home Affordable Refinance Program (HARP), more and more homeowners who are underwater have the choice to refinance and stay in their homes.

You'll need to meet certain criteria to qualify for a HARP refinance. First, your mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae. In addition, you'll need to be current on your mortgage and have a solid track record of paying over the one-year period prior to your application. But if you do meet these and other requirements, you could slash your housing costs enough so that you're able to either ride out the market and wait for your property's value to rise, or stay in your home on a long-term basis. As of 2014, borrowers who refinanced under HARP were saving an average of almost $350 per month, or over $4,000 per year, so it pays to see whether you qualify.

Rent out your home and move elsewhere

If refinancing your home isn't possible, another possibility is to rent it out and move to a less expensive rental yourself. This strategy works as long as you're able to command enough rent to cover most, if not all, of the costs associated with your home, including your mortgage payments, property taxes, homeowners' insurance, and maintenance.

Now the downside is that you'll have to pack up and move elsewhere, so if that doesn't work, you might consider renting out a portion of your home while continuing to live there. This works especially well if you have a finished basement or garage that can serve as a tenant's separate living quarters.

Borrow or earn more money on a short-term basis

If you're struggling to pay your mortgage but can't refinance and don't wish to become a landlord, you do have options outside of a short sale or, worse yet, foreclosure. Remember, if you attempt to go the short-sale route, which means selling your home for less than what you owe on your mortgage, even if your lender agrees, it'll still serve as a black mark on your credit. A better way to go may be to work a second job for added income until your property's value increases and you're able to sell it. Of course, if you're already clocking in 40 hours or more per week at work, getting an additional job won't be easy -- but it could help tide you over for a year or two.

Along these lines, if you have a decently funded Roth IRA, you might consider withdrawing a portion of your savings and using that cash to stay current on your mortgage payments. Unlike traditional retirement savings plans, Roth accounts let you access your initial contributions at any time without penalty and without having to pay taxes on withdrawals.

Now keep in mind that this only works as a limited-time solution, because if you drain your account, you'll put your retirement at risk. But here's an example where this strategy might come into play. Say you have a spouse who's currently out on parental leave but expects to return to work in a year or two, at which point you'll have enough income to cover your mortgage payments. Withdrawing from your Roth IRA could be a reasonable (albeit less-than-ideal) means of keeping up with your payments if selling right now isn't realistic, especially if you expect to start earning enough income to replenish your balance in time. That said, taking early retirement plan distributions can have serious consequences, so if you can borrow money from another source (say, a family member), you're better off leaving your IRA alone.

Owing more on your mortgage than what your home is worth can be an unquestionably stressful situation. Just remember that you do have options outside of a short sale or foreclosure that can be far less damaging to your finances.

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