正文
Why you should walk away, now...Regardless of your payment situation
I'mcommitted to no rehash on this blog. That is, no boring repetition ofall the things you already know about the housing bust.
If youbought a house in 2005-2006 in the affected areas of the country, youmust walk away from your house and the sooner the better. Its the onlysane decision you can make as a human being. Sanity, meaning to makedecisions which are in your best interest.
Here's your situation:
Youbought with a 3-5 year outlook. Noone pays principal or gains equity inthe first 5 years, except through appreciation. There is none. The 3-5year outlook is bust.
Ok, maybe you bought with a 10 yearoutlook. Noone pays principal in the first 10 years, noone gains equityeither except through appreciation. You are probably 100-150K in thehole on appreciation right now. You will have gained nothing by the endof 10 years.
Ok, so what about 10-15 years out? Well, manypeople have built in balloon payments between 50 and 100K at 15 years.This will negate any equity or appreciation that could be possible inthe 10-15 year range.
So the situation is this: you are makinghigher payments than necessary on a home which is not worth what youpaid, and you have no real expectation of capitulation in the next 15years. If you're really unlucky, your payments may be going up nextyear or the following one.
The only sane, rational, financialdecision you can make for yourself and for your family, is to walkaway. Your bank is walking away, Wall Street is walking away, its timefor you to do the same. Put aside pride, ego, wishful thinking. Thesooner you get this behind you the better off you will be.
Ifyou could rescue your financial position and be creditworthy in 4-7years why would you (a sane person) continue to deplete your finiteresources on a bad bet, and a diminished future?
The answer is you wouldnt. No sane person would. Time to walk away. Just walk away and have your dream another day.
I'mcommitted to no rehash on this blog. That is, no boring repetition ofall the things you already know about the housing bust.
If youbought a house in 2005-2006 in the affected areas of the country, youmust walk away from your house and the sooner the better. Its the onlysane decision you can make as a human being. Sanity, meaning to makedecisions which are in your best interest.
Here's your situation:
Youbought with a 3-5 year outlook. Noone pays principal or gains equity inthe first 5 years, except through appreciation. There is none. The 3-5year outlook is bust.
Ok, maybe you bought with a 10 yearoutlook. Noone pays principal in the first 10 years, noone gains equityeither except through appreciation. You are probably 100-150K in thehole on appreciation right now. You will have gained nothing by the endof 10 years.
Ok, so what about 10-15 years out? Well, manypeople have built in balloon payments between 50 and 100K at 15 years.This will negate any equity or appreciation that could be possible inthe 10-15 year range.
So the situation is this: you are makinghigher payments than necessary on a home which is not worth what youpaid, and you have no real expectation of capitulation in the next 15years. If you're really unlucky, your payments may be going up nextyear or the following one.
The only sane, rational, financialdecision you can make for yourself and for your family, is to walkaway. Your bank is walking away, Wall Street is walking away, its timefor you to do the same. Put aside pride, ego, wishful thinking. Thesooner you get this behind you the better off you will be.
Ifyou could rescue your financial position and be creditworthy in 4-7years why would you (a sane person) continue to deplete your finiteresources on a bad bet, and a diminished future?
The answer is you wouldnt. No sane person would. Time to walk away. Just walk away and have your dream another day.
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