All homeowners are making the though decision of continuing to make there payments or simply save what cash they have left. The latter has a high risk of derogatory credit and foreclosure. So the burning question when faced with this dilemma is “Should I stay or should I go” or should I refi my home?
The facts are that many people took cash out, borrowed more than they can afford, took teaser rates, or applied using some form of a stated income loan which would often over inflate the borrowers actual income through the home refinance or home purchase process. Every lender across the country has made it more difficult to get a refinance due to lower home values and mortgages with a higher balance than what its worth. When the bank threatens with foreclose several families are just walking away leaving the house to be taken. Is this the right option?
I don’t have the right or wrong answer here but I do know that up until the 90’s most people bought a house as a place to live and somewhere to stay and raise a family. Now I understand that is a very Walton’s way of thinking but it’s the truth and we all know it.We experienced a jump in the average national home value each year in the 90s. Lending practices began to recover from the S/L crisis and a new way of thinking was born in the lending world. Can you blink?Credit score? Well then you clearly must be able to pay for a house.With that the mid 90’s saw lower home prices and stated income was normal and accepted.But the exposure is there as national values increased at an unprecedented rate, and people use that equity to buy expensive toys. Surprise…if you leave a pile of money in front of people most will take it, and then buy high priced items to show off to their friends.
Fast forward about 10 years to 2008 we are all faced with the dilemma should I stay or should I go.With current lending standards I can just walk away and in theory buy the house or another house lower than what the value is now in 2 years. This is all true you can walk, you could buy your home for less, but do you really want to?We can’t sit here and say we all didn’t know what was going on; and we really don’t need the influence of the media directing people to abandon their homes. Again You knew what you were doing when you took the cash out home refinance, you knew what you were doing when you bought the home, don’t bring everybody else down even further as somewhere along the line we must just stop this madness.We are not a nation of quitters, and to side step an approaching depression we must all take a stand to save our houses….to save the economy.