With millions of Americans facing financial hardship and difficulty making their mortgage payments, there comes a time when a homeowner has to decide whether they should continue to make their mortgage payments and burn up their reserves or stop making the payments and conserve their cash savings. This should be your last option, due to the fact you will hurt your credit and face 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. The stumbling economy and a significant loss in home values, no wonder people are becoming trapped under mortgage payments they can’t pay and a home they can’t sell. There are a lot of people that are leaving their homes and just giving the properties to lenders. Are you making the right choice?
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.It shouldn’t take a conservative frame of mind to realize that is the way it is right now.It was a shock to some to see national home value increase seven percent a year though the nineties. Lending practices began to recover from the S/L crisis and a new way of thinking was born in the lending world. Your not buried yet?Have you checked your credit? Then we can presume you can pay for a home.By then home prices were lower and stated incomes supported those prices; with that in mind it could have been okay for stated incomes.Now you have an Achilles heel with outrageous home value increases and people scrambling to spend that money of high priced toys. Most used the money to "keep up with the Jones" purchasing big ticket item they really had no business of buying in the first place.
Fast forward about 10 years to 2008 we are all faced with the dilemma should I stay or should I go.If I leave the home I might be able to buy it back and home values should be lower by then. This is all true you can walk, you could buy your home for less, but do you really want to?Borrowers are as much to blame as anyone else; news coverage of the decline in home values is only prompting people to leave 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.It is possible for all of us to avoid a depression by starting with our mortgages; we all need to take responsibility.
