Stay or Walk?

[roho76]

I am trying to decide right now if I want to save my house. I bought two years ago and got a good deal as I thought. The builder got a check for $3000.00 at closing so I know I got the best deal I could before he was under and a better deal than most who bought at the top of the housing peek. But I am already under water on my mortgage. What am I to do, sit here and keep paying on my house that is going to keep loosing money hand over fist just so it takes 20 or more years to regain the loses when I can just give up and go with 7 years of credit problems and buy at the bottom. No thanks.

I'm thinking of sending the keys to the bank and moving down south and renting then when the housing market collapses I'll do a land contract till my credit turns around and then buy. In the mean time I'll keep up on all my other forms of credit so my credit doesn't go to complete hell.

I also would like to say I live in Michigan if that helps. I see MI as the Pittsburgh of today. I also want to move down south where there is a bigger chance of survival (ex., Heating problems, Planting crops) come the pending disaster.

What do you guys think? Anybody think I'm stupid for such a thing? Plus I would like to be as mobile as possible.

[ihsv]

I'm not going to tell you to stop paying your mortgage, since you did sign a contract saying that you would.

However, if you seriously can NOT pay it, or if there's a choice between putting food on the table for your family or sending that money to the bank, it's obvious that your family comes first.

I honestly don't know what to tell you, bro, except that whatever decision you come to is going to have to be made by you. Explore the consequences, the alternatives, seek advice from people who are in the same/similar situation, and then do what you have to do to survive.

[Ozwest]

It's far flung, but you sound in dire straights. Sorry about that.

If you can't keep up with your mortgage repayments and you have less equity in the house at point of sale.

Walk away. Now. It will only get worse.

Dump your credit cards and start afresh.

You sound like a fighter. It will come right for you.

[Ozwest]

I lived in a 23 foot caravan without a toilet for 3 years with my wife of (25) years.

We look back on those days as the best. And they possibly were...

[roho76]

However, if you seriously can NOT pay it, or if there's a choice between putting food on the table for your family or sending that money to the bank, it's obvious that your family comes first.

It's not that I can't pay it (right now). It's just that why pay to loose money? If you invested in stock and you realized it was a bad investment don't you get out before you loose everything. Plus I work for the Automotive Industry. The Big 3 are my Bread and Butter if they go then I go and then I won't be able to pay. And since I don't see the Big 3 coming out of this I'm getting the feeling that I should react and get the F*ck out of MI. And I quite honestly could care less about my banking obligations since my mortgage holder is stealing money out from underneath my feet. I will pay the rest of my credit off (even AmEx considering the money they just got but I will then close my account) because I'm not trying to destroy my credit but keep enough going that I will rebound quicker than most. I just don't think it's a good idea to be remaining in Post Apocalyptic Detroit scrounging for food and trying to pay my mortgage that is basically a waste.

[Ozwest]

It's not that I can't pay it (right now). It's just that why pay to loose money? If you invested in stock and you realized it was a bad investment don't you get out before you loose everything. Plus I work for the Automotive Industry. The Big 3 are my Bread and Butter if they go then I go and then I won't be able to pay. And since I don't see the Big 3 coming out of this I'm getting the feeling that I should react and get the F*ck out of MI. And I quite honestly could care less about my banking obligations since my mortgage holder is stealing money out from underneath my feet. I will pay the rest of my credit off (even AmEx considering the money they just got but I will then close my account) because I'm not trying to destroy my credit but keep enough going that I will rebound quicker than most. I just don't think it's a good idea to be remaining in Post Apocalyptic Detroit scrounging for food and trying to pay my mortgage that is basically a waste.

I am sorry to see good men in this situation.

Start planning for the worst case scenario, but utmost, make financial decisions with your brain, and not your heart.

Good luck friend.

[ihsv]

It's not that I can't pay it (right now). It's just that why pay to loose money? If you invested in stock and you realized it was a bad investment don't you get out before you loose everything. Plus I work for the Automotive Industry. The Big 3 are my Bread and Butter if they go then I go and then I won't be able to pay. And since I don't see the Big 3 coming out of this I'm getting the feeling that I should react and get the F*ck out of MI. And I quite honestly could care less about my banking obligations since my mortgage holder is stealing money out from underneath my feet. I will pay the rest of my credit off (even AmEx considering the money they just got but I will then close my account) because I'm not trying to destroy my credit but keep enough going that I will rebound quicker than most. I just don't think it's a good idea to be remaining in Post Apocalyptic Detroit scrounging for food and trying to pay my mortgage that is basically a waste.

I understand. Your situation sounds tough, and like Ozwest said, you sound like a survivor.

Your first obligation is to take care of your family. If you foresee that your future in your present location is going to harm them, and you're out of conventional options to hoof it out of there, then your only option is to use an unconventional way.

[Ninja Homer]

I'm in the same boat.

I don't have much equity. A lot of homes have foreclosed, or had people walk away from them, so there's a surplus of rental homes. I could rent a home of equal quality and in the same area for as little as half the amount I'm paying for mortgage. With so many foreclosures, and so many more coming in the next few years, credit score won't matter too much... there will be a lot of homes to fill and they'll have to ignore credit scores to fill them. Somebody owns them, and they don't make any money on them if they're just sitting there empty. Even now, with the rental homes, they don't give a damn about your credit score, they just want to know that you have the means to pay the rent.

Walking away from the mortgage is starting to look like the smarter choice for me. I lose any equity I have, but if I don't have much equity I can make that up pretty quickly with the cheap rental rates. If I bought in the last few years, my home may have been over-valued... it stings to think I may be paying extra for that mistake for 20-30 years. Everybody's situation is going to be different, of course, but it's definitely something to think about.

[enjerth]

Inflation is in the forecast, potentially hyper-inflation. The "value" of your home will be skyrocketing in relation to the dollar.

I would not recommend bailing out just because your home is currently falling in value. You have a contract to repay X in dollars, no matter which direction the dollar turns. It hurts in this short deflationary period of deleveraging, but it will work to your advantage in the long run.

Renters, on the other hand, will likely face a greatly increased cost of housing as inflation kicks in.

[tangent4ronpaul]

Can you rent it out for anywhere close to what you are paying for the mortgage? If you can, or you can get close - you will still have the equity...

-t