If you’re thinking about walking away from your mortgage, you’re not alone. I’ve seen and heard many stories recently about Charles County residents simply walking away from their home and mortgage debt, even if they can afford to pay it. With appraisals coming in lower and lower, foreclosures further lowering a property’s value, many simply do not see enough reason to pay a $350,000 mortgage on a home that’s now only worth $225,000.
It is a difficult decision for some, and a strategic move for others. Many people still have emotional ties to their home – where they raised their children, the home they dreamed of retiring to – and others cannot justify pushing their debt back onto the bank simply because they don’t want to pay it anymore. The truth is, more and more people are giving up their homes, abandoning their mortgage, and not feeling guilty about it.
Unable to get loan modifications, and with the Southern Maryland real estate market not vastly improving in the near future, some homeowners are simply mailing their keys to the bank, packing up and moving.
It can be difficult to dissuade someone from abandoning their mortgage when, for the same monthly payment, they could get a bigger and/or nicer home. Banks are trying to encourage the feeling of duty that some homeowners have. Don’t believe it! Just as a mortgage outlines your duty to pay it, it also outlines the protections the bank has if you don’t. You may have signed it, but so did they! Look at walking away as a tactical decision, not an emotional one. You should keep in mind that walking away is the same as defaulting on the loan, sending the home to short sale or foreclosure – either way, it’ll affect your credit score in a big way.
If you’re having concerns about the current value of your home, contact me today! I can compare your home to recent sales and active listings in your area to see what the ‘real’ value of your home is. If you decide to sell and walk on into a new home, I can help you with that as well!