Walkaway Mortgage
Should You Walk Away From Your Mortgage?
Millions of Americans now face the growing question, should they walk from their mortgage? There is now even a term for this, Jingle Mail is when you simply mail the keys to your mortgage company and move on. You'll still face a foreclosure but some believe that mailing in the keys vs living in the house after foreclosure is somehow better. Why are people walking away from their mortgage?
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House values have dropped. Many times what someone owes on their property is more than what the house is currently worth. Add to this a growing mortgage payment and the owner may decide to stick the bank with the loss in value of the property.
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Rents are still reasonable. Why pay $2000-$3000 per month for a mortgage when you can rent a similar or maybe better house for $1500 per month? This is what is in the mindset of someone who may consider walking away from their mortgage.
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Credit card and auto loans still need payment. When a person's mortgage payment is so high that other payments to utilities, car loans, credit cards etc are becoming delinquent a homeowner may choose to maintain those payments and sacrifice the mortgage payment. This is especially true if the value of the home is less than what is owed on the mortgage.
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A foreclosure will certainly damage your credit but if your facing foreclosure sooner or later anyway it may important to look at how ALL other debts can be paid on time.
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Keep in mind that a landlord will most certainly pull your credit. A foreclosure may look bad enough that the landlord may not rent to you. Adding to the foreclosure however other delinquent payments will result in an almost certain denial on decent rental property.