My wife and I are contemplating walking away from our home and wanted some advice or info to think about prior to doing it. Here is our situation:
We purchased a home in northern Michigan about 3 years ago. Since then, things have deteriorated dramatically in this state. My wife lost her job and we had to move to another state. We managed to rent, but since pretty much every home in this area is also being rented, we were unable to get an amount which covered the mortgage. However, a year ago, just when things were most dire, her employer let her return to Michigan and work from home. We booted the renter, got back on our feet, payed off credit cards, and built up our savings.
Last month though, her employer said her position was getting cut, but she could work in another branch 3 hours away. So we have to move by the end of this month. We have been unable to find a renter since things are even worse than before. We can't sell the home since the area is saturated with foreclosures (which are also not even selling!). Jobs decrease daily with no hope of improving. Our home is worth less than we owe, and the lack of buyer's in a buyers market only propels the mess.
We feel that our best option is to just walk away and pocket the money we would pay on the mortgage. We'd basically be debt free and in a good position to pay cash for everything. Where we are moving, we can rent really nice homes for cheap (since Michigan is filled with people who left). Plus, the situation in Michigan looks dire for another 3 to 5 years at best case. And by then, our home still will probably only be able to be sold for what we owe. We feel that's basically a loss. People keep telling us to "find a buyer and sell cheap now". But there are NOT ANY BUYERS.
We are wondering if foreclosure is in our best interest? We don't care about the moral side, ethics, etc. I mean, companies and businesses do this sort of thing all the time. Why can't a person do it as a financial plan? But what are the penalties? We realize credit scores will be hit, but we'll have cash and basically do the Dave Ramsey plan. However, does anyone know how much foreclosure costs, as in what you might owe or have to pay to the banks, lawyers, etc.?
I know it was a long post, but any advice or info to help us make a decision would be appreciated. Thanks!
We purchased a home in northern Michigan about 3 years ago. Since then, things have deteriorated dramatically in this state. My wife lost her job and we had to move to another state. We managed to rent, but since pretty much every home in this area is also being rented, we were unable to get an amount which covered the mortgage. However, a year ago, just when things were most dire, her employer let her return to Michigan and work from home. We booted the renter, got back on our feet, payed off credit cards, and built up our savings.
Last month though, her employer said her position was getting cut, but she could work in another branch 3 hours away. So we have to move by the end of this month. We have been unable to find a renter since things are even worse than before. We can't sell the home since the area is saturated with foreclosures (which are also not even selling!). Jobs decrease daily with no hope of improving. Our home is worth less than we owe, and the lack of buyer's in a buyers market only propels the mess.
We feel that our best option is to just walk away and pocket the money we would pay on the mortgage. We'd basically be debt free and in a good position to pay cash for everything. Where we are moving, we can rent really nice homes for cheap (since Michigan is filled with people who left). Plus, the situation in Michigan looks dire for another 3 to 5 years at best case. And by then, our home still will probably only be able to be sold for what we owe. We feel that's basically a loss. People keep telling us to "find a buyer and sell cheap now". But there are NOT ANY BUYERS.
We are wondering if foreclosure is in our best interest? We don't care about the moral side, ethics, etc. I mean, companies and businesses do this sort of thing all the time. Why can't a person do it as a financial plan? But what are the penalties? We realize credit scores will be hit, but we'll have cash and basically do the Dave Ramsey plan. However, does anyone know how much foreclosure costs, as in what you might owe or have to pay to the banks, lawyers, etc.?
I know it was a long post, but any advice or info to help us make a decision would be appreciated. Thanks!
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