Should I foreclose or wait 10 years to recover investment?

Question

I bought a nice huge house in mid2006, hoping the market would continue to grow, therefore making my buy a good investment, but as we have all seen, the market is going down still. Should I call it quits and walk out on my mortgage and rent for a few years, or try and stick it out for ten years hoping to recover some of the very high monthly payments that I'll be making all those years? I know that thousands of people in my situation are walking away and adding to the staggering statistics in this historic time for the market.

More info for better answers is this...I also own a second home that I couldn't sell or rent or shortsell so is now in it's last month of foreclosing. If I could save it I would. I can't afford to rent it if it doesn't cover the high mortgage pyment, since it is also a 3000sq ft beautiful new home, it's hard to find renters for this size home, 5bed, 4full baths, 3living rooms, culdesac. It seems nobody wants to buy or rent it in these chaotic time. On the house I live in now, also very big, I'm squeezing by every month on the payments, but falling behind on the taxes since they are not included. I don't know if I can wait and how long I would have to wait to recover. Some loan officer friends are telling me to go ahead loose all the properties and rent for a few years and work on a new strategy to buy in the ideal time when all the prices will bottom out. Is this good advise or not?

Answer 1

Unless you paid a ridiculously high price the market should turn around and leave you even in 2-3 years. Hang in there.

Answer 2

Not an easy situation to be in. I am also floundering, in the same situation. Before you make any decisions, spend some time evaluation your personal budget. Look at the tax incentives to see if what you are bring home ($) breaks you even if you were to rent. If there is a big difference, calculate what you would save, if renting, and add it up over the 10 years. I don't think the American Dream of owning a home is worth loosing tens of thousands of dollars, with no up side of the home increasing value any time soon.

Thats just a start.

And it is totally "Bull" thinking that the market will come back within a few years, just look at the trend and history, we are headed towards recession. No federal help, or tricky bank loans will stop this trend.

Answer 3

Do not walk away from the mortgage. Firstly, your credit would be ruined, but secondly it's not smart financially. Making money in real estate is not about recovering monthly payments. There's no such thing as living for free. It's about benefitting from the long term increase in prices. Real estate values trend up in general. We are in a downturn right now, but it will not last forever. I'd stick it out for a while and see where the market goes.

The bottom line here is that real estate is never a good short term investment. If you want to make a quick return, buying and selling homes is not the way to do it.

Answer 4

I would not walk away. There is always a slump in every type market. Hopefully, you did not purchase your home above appraisal or in a bad area. Renting is just throwing your money out the window. I would sit tight and wait for an opportunity to sell. Even if you sell at a break even, you have not lost anything, and have also maintained you good credit for the next purchase. Everyone needs a home, the housing market will recover in time.

Answer 5

If you can afford to hang on to the house, that's what you should do, it won't take ten years for the market to recover, its more like 2 years and prices will skyrocket again. Try renting out the property instead, if you're living in it and having trouble with mortgage payments, rent out a room or two or the garage.

Answer 6

i ought to tell you that the Philippines could get closer our economically nicely-off neighbours in SE asia in 10-two decades time... yet i could be mendacity. the subject, i think of does not lie totally on the management / government. the folk has a great bite of the blame right here. In a united states the place the single which gets away with cheating is extensively seen the neatest, this is stressful to verify any gentle on the tip of the tunnel interior the closest destiny. think of roughly it... a guy hops in a bus or jeepney. he's thinking of how he can cheat his way into paying much less. the driving force is busy attempting to come to a decision a thank you to load and unload passengers the place this is not allowed. The cop on the line is preoccupied with a thank you to get the juciest bribe. The pedestrians are checking if the cop isn't looking so they'd jaywalk. The streetvendor is putting an indication which says "20 pesos in line with kilo-bag" of calamansi on bags that contain 3/4 of a kilo. The cigarette seller top beside the calamansi seller is promoting cigarettes to minors. The minors are slicing instructions and could play video games rather. The video pastime attendant is working a company without license. The licensing all human beings is going abode from artwork 2 hours until now they're meant to. The tricycle driving force is determining on up the licensing human beings.... you get the factor. This chain of events / situations is seen somewhat an unavoidable certainty interior the Philippines to the factor the place the undemanding Filipino no longer see the incorrect in it. And it is being surpassed directly to the subsequent era. I actually desire that our united states could at some point be an economic stress to reckon with, which includes what Thailand and quickly, Vietnam, has substitute into. I in simple terms don't think we are going to be alive while that day comes. in line with possibility our young toddlers could do it greater beneficial than us. enable's desire so.

Answer 7

The ONLY reason you should EVER consider foreclosure or a short sale is if you are unable to make the payments after cutting your budget to the bone.

People in your "situation", i.e. who can afford the payments but don't like the fact that they're in a possible negative equity position, do NOT walk away from their obligations!

Given that foreclosure will trash your credit (and hopefully create a Cancellation of Debt tax liability in your case) you'll be getting your just rewards for walking away. I hope it costs you a bundle if you choose to go that route!

Answer 8

stick with it. You never know what tomorrow may bring unless you do foreclose and then you for sure know what yours brings - bad credit.

The ONLY reason to foreclose is--- if you just absolutely can NOT make you payments no way no how! Other then that - stick with it..

also go ahead and put your house on the market - better to sell then to foreclose-- even if you sell for a little less and have to bring $ on the table that is better then losing everything with it.