Homeowners who are significantly underwater with their mortgages should consider walking away from those, according to Brent T. White, an associate professor at the University of Arizona’s James E. Rogers College of Law.
In a paper titled titled “Underwater and Not Walking Away: Shame, Fear and the Social Management of the Housing Crisis,” White writes most homeowners do not walk away or strategically default as a result of two emotional forces:
• The desire to avoid the shame and guilt of foreclosure
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I could not agree more. However, many people grow very emotionally attached to their home.
If you are underwater in your home but are still holding on you have to think about a few key factors. You are living in a home that you probably will not be even in (owe what the home is worth) for another 10-15 years depending on how upsidedown you are. You can let the home go and rent for the next 3 years, then buy the same or a simular house for about what it’s worth now (if not even less). As long as you build your credit, save for a down payment and are able to financially qualify for a home loan in three years.
Loans are continuing to adjust and home values are expected to go down a little more in the next two years. Finally, three years from now, home values are expected to climb again but this time it will be a very slow climb.
Stay in your home for Rent until you can get one of our Private Money loan