What is the Right Decision With my Mortgage

With the current economy families across the country are making the tough choice of continuing to make payments on their homes or save what little they have left to start over. There is a "hit" to credit and you will 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. A lot of people are tied down with mortgage payments they can not keep up with, and then when they attempt to refinance they find that is not an option due to restrictive credit markets and falling values. Why are so many people leaving their homes to the bank to foreclose on; I might never know. 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.I know that is a traditional line of thinking but its the facts and we all know it.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. Are you alive?Do you know your FICO score? Well then you obviously are able to get a house.With that the mid 90's saw lower home prices and stated income was normal and accepted.Now we have the heart of the problem, which was unprecedented increases in home values and people spending that money just as quickly. Most of us took money from our homes to purchase the things we could not normally afford, and this began a cycle of refinancing for the new toy everyone wanted that year.

 

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 house to the bank in 2 years I should be able to buy back the house at half the price than what it would be today.  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.We all know that the economy is hurting, we need to take charge of our mortgages to avoid a depression.