Nowadays

Nowadays, it seems that everyone I meet is “upside down” on their home. What does that mean? It means that they owe way more than their home is worth. And the really sad thing is that it may take years for values to catch up. For example, when Japan went through its financial crisis in the 1990’s, it took over 10 years for things to start getting better. It looks to me that we may be in for the same type of stagnation, i.e. a long period of time in which values of real estate do not increase at all. What can be done about it? Well, everyone with a home needs to think hard and carefully about their individual situation. There are a number of options, and considerations. The amount you owe versus the market value of the home. The relative cost of owning versus renting. The cost of maintenance of the home. Tax considerations. The cost of moving. The trouble of moving. How long you intend to live in the home, or the area in which you live. Your age, income. The need to reduce housing costs. Your other debts, investments. Your ability to save. How will your credit be effected if you do choose to walk away? Those are some of the considerations. How about your options? Should you stay or should you go? You can stop paying on the mortgage and let them foreclose. You may be able to live there several months rent free and save up for your move. If you have a second mortgage, you might want to talk to a bankruptcy lawyer to see if you can get rid of that second lien using the federal bankruptcy laws, and stay. A bankruptcy lawyer is equipped to help you with many of these issues.