Thinking of Walking Away from Your Mortgage?
If you are considering whether to “strategically default” on your mortgage, be sure to look into all of your options. Results of a recent study estimates that 36% of Americans think that walking away from their mortgage is a viable solution when they owe more on their home than it is worth. With one in four American homeowners “underwater”, you are not alone.
In a “strategic default”, homeowners simply stop paying their mortgage when they owe more than the home is worth. They just walk away, not understanding that the inevitable foreclosure carries consequences they haven’t considered.
3 Reasons to Question the “Strategy” in “Strategic Default”:
1. Defaulting on purpose is not strategic. Options including short sale, mortgage modification and refinancing (just to name a few) are worth consideration before you expose yourself to credit issues, current and future employment challenges, security clearance problems and possible debt collections which can result from a foreclosure.
2. Waiting periods to obtain a new mortgage are considerably less in a short sale vs. a foreclosure–possibly as much as five years less.
3. A foreclosure will appear on your credit report and affect your financial situation for many years to come. That will be inconvenient, to say the least, every time you apply for a home loan, auto loan, new job, and many other occasions.
Fortunately, you have options available to avoid foreclosure and protect your financial future. Always seek legal advice before deciding on your strategy.
Request our report today and create a genuine strategy which will help to protect your financial future.
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Survey Source: Chicago Booth/Kellogg School Financial Trust Index