One point that might be made is that it is very possible that when the recession relapses, property values may recover.
I have to look at bankruptcy as a last possible end, not as a mere convenience when things go a little badly.
Should I walk away from my "underwater" home?
by The Berean 113 Replies latest jw friends
-
-
acolytes
The Beran
You asked Is their a moral obligation. Maybe a business answer is your preferd option. Since records were kept house prises double every 10 years. Ok the last decade they went 150% .So five years of decline. Stick it out its better than renting.
Anyway when the banks paid of you win. Only NEVER get an interest only loan unless you plan on repaying the loan AS SOON AS POSSIBLE.
Acolytes
-
Elsewhere
> Is there a "moral" obligation to continue in a dwelling, even at a loss
No.
A mortgage is a business contract and has nothing to do with morals. Do you think the bank would have any problem foreclosing on you if you started missing payments?
If there is anything I learned from the “financial crisis” is that corporations have NO SHAME and NO MORALITY when it comes to business arrangements. I have decided to treat them the same way they have treated the people.
Start the process of buying another house and once you are closed, walk away from your old house. (This way your bad credit score will not prevent you from getting the new house). Your credit score will be back to normal after 5 ~ 7 years.
For even better ideas, there are lots of books out there about this very subject.
> You CAN walk away from it, but you shouldn't.
This is NOT true. I challenge anyone to find such a clause in any contract.
-
Elsewhere
> You can be chased by the bank after the foreclosure, your wages being garnished etc. etc.
This is also not true. Once they foreclose on the house, your obligations in the contract have been satisfied.
-
watson
When you sign a contract, you give your word.
Even after getting screwed by the banks, corps, realtors, shouldn't we honor word?
Bankruptcy should only be used if you CAN'T fullfill your obligation, and are in danger of being on the street. Isn't that the reason for bankruptcy. I never thought of it as a "strategy."
-
Elsewhere
> When you sign a contract, you give your word.
This is not true. A contract is a written agreement. Go dig out your mortgage paperwork and you will find that part of the agreement involves you walking away.
By walking away from the house and allowing the bank to reposes, you are in-fact satisfying the contract in full.
-
Elsewhere
The Foreclosure Survival Guide: Keep Your House or Walk Away With Money in Your Pocket by Stephen Elias ( Paperback - Sep 29, 2008) -
-
acolytes
Just to clarify my figures of house prises doubling every 10 years was based on England and Sweden. America I suspect is similar. Learn from the crash in the 80s.
A-STICK IT OUT.
B-Get on top of the loan.
C.-the equity is your kids future.
D-Plann to pay off the mortgage(Loan) A.S.A.P- (When the debts paid its your home)
E-FIVE YEARS FROM NOW THEIR IS KNOW NEGATIVE EQUITY.
I think it is wise to buy a property in an exspensive area. Buy as YOUNG as possible. If you pay a loan off on a property(Or have equity) in New York or London. you are made for life. Can live anywhere.
OWNING PROPERTY IS THE SAFEST FORM OF INVESTMENT IN THE WORLD. Dont give up and go to rental- long time you loose BIG-
Acolytes
-
acolytes
Elsewhere
I have tremendouse respect for you- One of the resons I registerd with this site was your funny and informative posts.
However I must say your understanding of these contracts whilst correct fails to understand that the contract clause allowing a purchaser to walk away is written in the banks favour. It means break the contract and get behind on the repayments but then you walk or we evict.
Believe me dont take that option. When you take a loan from a bank have it in your favour. You benifit by getting on top of the loan . Never take a interst only loan. Borrow a house loan to be paid back in 20 or 30 years. Then pay more on your monthly payments(Sod the new T.V and Sofa) A 20 year loan can be paid back in 15 years. Have fun living rent free.
Acolytes
