Would you Walk Away from your Home

[ua_guy]

I would hold on to my house. I have one, and I know that walking away can damage your credit score really, really badly. Not to mention the morals of it.

It's about a 200pt hit on your credit. If you have perfect credit like I do (800+ beacon), worst case scenario is dropping to about a 600 beacon.

My cousin went tits-up in her condo 2 years ago. They finally booted her after 18 months of living mortgage-free. She was also a perfect credit score and said after all was said and done, she's back up in the 650 range.

My sister is also a 650. She qualified for 0% financing on a new vehicle purchase 2 weeks ago.

If you have really crappy credit, yeah, I can see the fear of walking away from a mortgage. But if it drops you from 'excellent' to 'average' and people are still willing to throw money at you....there's no fear.

[disneysteve]

Obviously, this is an issue that we won't ever resolve. The folks who feel it is morally and ethically wrong to default on your mortgage if you can afford the payments aren't going to change their minds. The people who see nothing wrong with defaulting on your mortgage aren't going to change their minds either. Not much point in continuing to go back and forth on the issue.

[maat55]

Something to consider.



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[tripods68]

Tell me it doesn't work in my favor. (It's a good thing I have a conscience, still debating my overall responsibility to the USA as a homeowner).

Our 2nd Loan mortgage is what prevent us from doing this, which we won't be able to pay off at least 5 years (making payment just above minimum). It isn't large enough but we love our school district. Similarly, my co-worker is ready to bailout but can't because he owe about $80K in his 2nd. Ouch!

[canada94]

Setting aside any ethical feelings or the importance of honoring a contract that you may have about people "why they shouldn't "walk away" from their home". I won't argue this to you.

I'm talking about "strategic" default. So assuming you are up-side-down on your home like many Americans, yet you can still afford the payment, but can't stand the idea of your home have LOSS tremendous value. Some Economists think your home value may or may not reach the original loan balance again. It might take decades to recover. Knowing this reality....

From the pure business sense, would you "walk away", knowing in the next few years you can buy another home at lower price after your credit improved?

OR,

Would you simply hold on till the housing market value improves again that may or may never happen?

There is always highs n lows when owning a property, it depends on how you look at it, when the markets low, its a great time for investment,(like at the moment).
However, have you asked yourself the 'real' reason your having these thoughts, is there something underlying that makes you think this way....just a thought.

Why wreck your credit for nothing.


Hope this helps

[Frugal]

I personally would not walk away from a home, ever, even to save money on a house or other bills. A house has emotional value and memories, more than just a monetary value. That being said, in some situations it could be a hard call whether to walk away from a home or stay behind and stick things out, when the going gets hard financially...

[jerrycates]

It is not really like walking away from home but rather moving out so you can try to live your life on your own. It is a good thing to do. It can help and mold someone into something in the long run.

[littleroc02us]

Obviously, this is an issue that we won't ever resolve. The folks who feel it is morally and ethically wrong to default on your mortgage if you can afford the payments aren't going to change their minds. The people who see nothing wrong with defaulting on your mortgage aren't going to change their minds either. Not much point in continuing to go back and forth on the issue.

My only question to that statement would be this, "So moving forward when I sign promisary financing papers for the purpose of buying a car, boat or house, am I obligated to pay the loan back from this point on? My perception from this post is that some people say I don't have to pay back the loan and others say I should, so what do I if things are going bad in my life? I don't think I'll pay. This may help me in the future.